Do you see that same level of pressure decline all throughout the Permian, no, it’s specific by bench, it’s specific by area depth, which portion of the country that you’re in. So it’s not a blanket answer, which again is why I kind of come back to when you’re developing your asset, the same thing for Callon. You want to do a fit-for-purpose design, because not each area is seeing a similar phenomenon, but not at the same level ought the same degree, not the same — not at the same with every bench, right? You don’t see it, because maybe the reservoirs that start out with the same in-situ GOR and start out with the same historical — our geologic history and diagenesis. So there’s all sorts of reasons that produce different results, but the process and the learnings we can apply everywhere.
In terms of, yes, where I see us spending money or where we see ourselves spending money, definitely a lot of — probably more weighted to the Delaware East and Midland asset in ‘24. We do still have projects still in the South and in the West and then we’re working on some things longer term to make the investment opportunity even more exciting in those basins, those part of our assets, but more to come on that. That’s the teaser for next year.
Scott Hanold: Okay. More specifically to that answer then, and you talked about that everything is kind of a region specific to a certain extent, and you got to fit to design to that area. Do you all feel you have a pretty good handle on that moving forward? Or is there still some learning — is 2024 is still going to be a partial learning year? Or do you feel good about where you’re entering the year and setting those expectations?
Russell Parker: Well, one, we feel good about where we are. But two, I think you’re always learning. We should learn on each and every path. So I wouldn’t say we’ve never stopped learning and never expect to stop learning or modifying, tweaking and improving. If the organization does that, you kind of dial in — you dial in on the line. But no, I think we feel good about where we are, where our current set of expectations are. We feel good about what we’ve learned. And then all that said, from here, we look to try to improve and improve and improve. And again, you never — and actually, this is a new focus on the team. We review each completion at the time of [AAP]. We reviewed each completion 2 weeks before we actually complete it [indiscernible].
And with each pad, each field where each business unit is working on little tweaks, little design implement, little things that we’re learning from ourselves, from offset operators that will notch out another 3%, 4% rate of return. Just like when it was in the slide deck you saw, there were couple of little things you could do, add 3, 4%, 5%, 6%, 7%, 8%. Well, same thing happens with completion design. Same thing happens with [indiscernible] landing and spacing. Same thing happens with your role texture cost structure. And all of a sudden, you take inventory that might have been 20% rate of return, you’re making at 40% or 50%. It takes a lot of effort to get you there, but that’s going to be an ongoing process. But I’d say generally, we feel good about where we are, but I don’t expect us to stop learning, we should always keep learning and always keep modifying.
Scott Hanold: Understood. And Joe, this one might be for you. I mean, obviously, you guys are very focused on getting the operations where they need to be, getting the cost down. I mean that’s obviously priority #1, but certainly, consolidation has become extremely topical here over the last few months. You guys have — yourselves have been involved in it for a number of years as well. Can you talk about the thoughts on Callon and where it’s on sort of consolidation where you’d like to see the company over the next few years?
Joe Gatto: Yes, Scott, I’ll hit that at a high level. I mean, obviously, we’ve seen a lot of consolidation of assets and some corporate activity out there. That shouldn’t be all that surprising anyone who’s been around this business that happens over time, not only as people pursue inventory. But with this latest iteration, obviously, cost of capital for this industry has gone up and largely speaking, bigger companies are afforded a better cost of capital. So we’re laser-focused on what’s happening around us. And as we said, we’ve actively participated in that in shapes and forms over time. I think we have to be nimble and make sure that we’re positioned to participate in the right way consolidation and that boils down to 2 things. One is having a robust inventory, the strong economics, which we have and a good balance sheet that’s improving, which we have. And that gives you options across the spectrum moving forward.
Operator: Our next question comes from Paul Diamond with Citi.
Paul Diamond: A couple of quick ones for me. In the prepared remarks, you guys talked about some learnings around deeper zone being able to be developed separately from other benches. Just wondering if you can provide a bit more color there?
Russell Parker: We did an experiment earlier this year in which we fingerprinted, if you will, the fluid from a bunch of — from all the different benches. And then we use that fingerprint along with several fluid samples in each of the wells in each bench that we took over time, to see which wells we’re communicating with which wells over time. And it was very interesting, you’d see a different mix of communication from early in life to late life. But from that process, we could figure out which benches basically we’re not communicating, which our outpart apart the well needs to be in which you really didn’t see that communication, if not early time, but over the long term, meaning you have the opportunity to potentially develop those benches at a later date.
So it’s through a process of fluid fingerprinting quite detailed, and there’s a couple of different companies that specialize in this, but that’s how we’ve done it. And we’re applicable, we may be — a few more experiments where we get that kind of data again to help us better understand exactly what reservoirs are communicating with what reservoirs and of which pattern, because it also — the order in which you develop the reservoirs will impact that, whether not you’re drilling upper wells versus lower wells or lower well or suffer wells and which order they come in over time. So — but that’s how we did it. It was a fluid fingerprinting experiment.
Paul Diamond: Understood. Were there any geographic areas that was more focused in? Or is it pretty much the entire Permian?
Russell Parker: That particular experiment I’m referring to was in the South, but we may look at doing some similar experiments elsewhere in our acreage in ‘24.
Paul Diamond: Understood. Just one quick follow-up. On Slide 8, you had some pretty interesting kind of trend data on spud to rig release, competitive laterals and D&C per lateral. Just wanted to get an idea of how you guys are viewing as those trends going forward into ‘24 and beyond? Should we assume somewhat linear or diminishing returns or just how you guys are thinking about that?
Russell Parker: I think you’ll see — it will be a [indiscernible] for sure. We’re already realizing some of it. We’re not to the end of the [indiscernible] at all yet, I’d say. But with any program like this, as you look to make tweaks and look to make tweaks, kind of you hit your lowest-hanging fruit early, which may be say casing streams when we talk about well design, and then the more difficult tweaks come later, exact [indiscernible] program, exact-fit program, all the other little pieces that will save time off, but maybe not as dramatically as say, eliminating a casing stream. So I’d say we’ll never stop trying. But obviously, in any design change, you always see the lowest hanging fruit first, which means you get your biggest impact first.
