It is affordable, reliable and lower carbon. And I don’t know that we can say that enough, but the trade-offs are not as good and it’s important that we remember that. And it’s important that as an industry, we deliver on a product that meets that expectation, that it is the most efficient solution to cost and affordability to reliability, and to being lower carbon relative to the alternatives. The alternatives, of course, being in a lot of markets, coal, which is certainly not lower carbon at times, it can be lower cost and it definitely can be reliable because it is easily stored on site. But then you also have renewables, which will maintain a competitive tension, especially with policies that drive people towards renewables that really struggle from both a cost and reliability perspective in full cost, and have some of their own challenges from a sustainability standpoint that are just different than the product that we produce.
So we still feel very strongly that what we produce is the best solution and it’s incumbent upon us to make sure that we deliver on that.
Mohit Singh: Thanks and Neil this is Mohit. The only thing I would add to that is, we are signing up 20-year LNG transactions, and we are going in eyes wide open that there will be periods of time when that transaction will be out of the money. So it’s a diversification and connecting us to the eventual end users, as Nick was describing, that’s the strategic mandate for us. But again, being fully aware that there’ll be periods of time when we’ll be out of the money.
Neil Mehta: Makes sense. Long-term views. Thanks, guys.
Operator: The next question will come from Paul diamond with Citi. Please go ahead.
Paul diamond: Thank you. Good morning. Thanks for taking my call. Just a quick one on the kind of the timing and the cadence of the DUCs and the TILs. Should we think about that more linearly from this point forward through the year or is there kind of a point in, like, a Q3 where you just stop and kind of revert back to normal? How should we think about the cadence?
Josh Viets: Yes. So, really, what that ties back to is just the underlying activity cadence of our drilling rigs and frac crews. You know, where today we’re running eight rigs and two frac crews and so we do anticipate that we’ll drop one additional rig in the Marcellus middle of the year. But by and large, you should expect those fur TILs and DUCs to build in a linear fashion through the course of the year.
Paul diamond: Understood. Just one quick one or one quick follow-up. If we were to see any kind of increased volatility out of the three levers, I guess, for additional DUCs, TILs or for the curtailments, is there any preference you guys currently hold? Kind of what order you’d address any near-term volatility with?
Nick Dell’Osso: Well, I mean, I think it all depends on what’s going on. If you have some sort of short-term spike in demand that we don’t think will be sustained, then we have curtailed volumes we can bring to market to help meet that demand. If you think that there is more of a step change in demand and volumes are needed in a longer term fashion, then you start to bring some of those deferred wells online.
Paul diamond: Understood. Thanks for the clarity.
Operator: And the final question for today will come from Kevin MacCurdy with Pickering Energy Partners. Please go ahead.
Kevin MacCurdy: Hey, good morning. To dig into the curtailments a little more, the 2Q guide shows that the Haynesville is declining faster than the Marcellus. And just curious if that’s being driven by something you’re seeing on local prices that is leading to more constraints or is that just natural declines in the Haynesville.
Josh Viets: Yes, that’s really just due to local market conditions we were seeing pricing there that we just really start to question whether or not it makes sense to continue to flow gas in those markets. And so we selectively look at the well sets and what margins are for each well, recognizing that chemical usage, water production, will impact wells margin. And so, we just think that pricing that we’re seeing in the second quarter, simply doesn’t make sense to flow the full allotment of volume there. So when we talk about the 400 million cubic feet a day of planned curtailment in the quarter, roughly half of that is tied to the Haynesville. So when you look at the quarter-over-quarter decline from Q1 to Q2 for the Haynesville asset, a big portion of that is directly tied to the curtailment.
And of course, we all start to get that back as we get into the second half of the year. And again, that’s just why you see then, or should anticipate a flattening of the decline in the second half of this year.
Kevin MacCurdy: Great. Thank you for that detail. And to follow-up on an earlier question about returning production, do you have the capacity to bring back volumes on faster in one basin compared to the other or will it be about the same in the Haynesville and the Appalachia?
Josh Viets: Yes, it should be about the same. I mean, there’s a lot of considerations that are going to go into how we bring the production back, I mean, outside of just the macro conditions that Nick spoke to earlier. But it’s really just around logistical planning and so we have to be thoughtful about where gas gets introduced and when to manage, the gas gathering systems and things like water hauling. But really, I wouldn’t say one area is advantaged or disadvantaged more than the other.
Kevin MacCurdy: Great. I appreciate the answers. Thank you, guys.
Operator: This concludes our question-and-answer session. I would like to now turn the conference back over to Mr. Nick Dell’Osso for any closing remarks. Please go ahead.
Nick Dell’Osso: Well, thank you all for your time this morning. We really look forward to progressing through this year, working on planning for the integration of our merger and delivering on what we expect to be improving gas market conditions as we approach 2025. As always, if you have any other follow-up questions, please reach out to our outstanding IR team. They will be ready to take your calls and we look forward to see you guys out on the road. Thanks.
Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.
