Leo Mariani: I wanted to follow up a little bit on the regulatory environment here. Obviously, good to see that there’s a compromise between NGOs, the legislature, the governor and industry here. But just wanted to kind of clarify a couple of things. So I know there was a bill going around that essentially would put some kind of summer stipulations on sort of largely on frac activity. And just wanted to verify that, that’s going to be going away as a result maybe it already has I don’t know if it passed any committees. And then just with respect to ballot initiatives, I’m not an expert in Colorado Civics or anything like that. But presumably, there could still be groups that could put forward a ballot initiative, I think under the current kind of rules of the state, certainly, I guess the governor can oppose it publicly and legislature can oppose it publicly.
But is it just a matter of having kind of enough signatures at the end of the day and kind of getting that approved by the right agencies in the state, where there still could be anti-oil and gas ballot initiatives? Just wanted to get some more color on that.
Hodge Walker: Leo, this is Hodge. Thanks for the question. With regards to the one legislation piece that was out there that had the potential for the pause during the summer. That has been – that is a part of this compromise and will be pulled down as a part of this broader compromise. So that is in motion as we move through this legislative session. Good question on the ballot initiatives and to your point, from the position people can bring forward ballot initiatives part of what we’ve agreed to with this broader discussion not only with the governor and the legislature, but also with the NGOs is that we are going to stand down the ballot initiative efforts, meaning them being – bringing forward ballot initiatives against the actions of this industry.
And quite honestly, the industry putting some countermeasures out there. So that is a part of the broader agreement. To the same point, having the governor come out and say that he’s against these types of ballot initiatives gives even more strength behind this compromising agreement.
Leo Mariani: Okay. I appreciate that. And I guess just on well costs in the Permian. I just want to make sure I understood the comments correctly, I think you guys said that you’re down about 5% year-to-date on D&C cost per foot. Obviously, that’s great progress here in one quarter. I just wanted to verify, is that mostly just kind of related to efficiency gains? I don’t know if there’s any OFS changes in that number? And it sounds like you have a lot of momentum there. So that 5% reduction, it sounds like that can get a lot better during the year. Just want to get a sense of where that might go in the second half.
Hodge Walker: Yes, Leo, this is Hodge again. To your point, 5% down, this is one quarter. We’re very excited about where we are. I think we’re seeing efficiencies faster than where we thought we would be at this time. But at the same time, we’re doing a few high fives, but we’re not spiking the ball. There’s continuous work to be done here. We’ve got a team that is focused on and has a foundational DNA of continuous improvement. They’re challenging themselves on how to do things safer, better, faster every single day. Most of the cost savings we’re seeing here are attributed to operational and equipment that we’re using. We’ve changed out some rigs, and we’ve added horsepower on our completions so that we can increase our ability to do work and do it in a timely manner, and we’re shortening our cycle times associated with that.
We are seeing some reductions in pipe costs, but the majority of the savings we’re seeing here are around processes and equipment that we’re using. Excited to see where this team is going to go. We will continue to focus on continuous improvement, and we’ll see how this progresses over the course of the year.
Chris Doyle: We haven’t rolled those savings all the way through our 2024 plan and don’t know where we will be one quarter, two quarters, three quarters from now. And I think that is going to provide a tremendous amount of flexibility in terms of how we can redeploy that capital. I think there is a lot of noise in the system. We’re being conservative, rightfully conservative because it’s early to Hodge’s point, but super excited about what this team is already delivering. And I’m more excited to see what we can talk about next quarter and the following quarter.
Leo Mariani: Yes, no. I appreciate all that color. I know it can be hard to quantify the future, but definitely sounds like you’re confident those costs will be lower in the second half.
Chris Doyle: Thanks, Leo.
Operator: Our next question comes from Phillips Johnston from Capital One. Your line is now open.
Phillips Johnston: Hey guys. Thank you. Most questions were asked and answered, but I’ll just leave it with two quick housekeeping questions. First, do you guys have any material infrastructure needs over the next 12 to 18 months? And then secondly, NGO realizations were stronger than I would have expected in Q1 at about 30% of TI or so that’s towards the high end of your annual guidance range. I realize the range is unchanged, but can you maybe talk about the dynamics there and what your expectations are for the rest of the year?
Marianella Foschi: Sure, Phillips. I’ll address your first question and let me know if it’s not what you’re trying to get at in terms of infrastructure and gas takeaway, Permian wide specifically, so everything that we think we need to spend is in our budget, right? I would say from a Permian takeaway perspective, we have two very supportive strong partners. And those partners have their budgets for what they believe they need for infrastructure for this year. I will say to underpin that over the last couple of quarters, we’ve seen planned and unplanned maintenance and some of the planes down there, and we really haven’t seen any impact on flow. Obviously, we felt the pricing impact on Waha widening, but no constraints itself.
