Tim Rezvan : I wanted to dig into the Permian a little more, given your position, just got bigger at the start of the year with Vencer. Do you plan any similar sort of facilities work as you integrate the new assets? And I’m just trying to think how we should think about items like LOE going forward? Do you see some short-term increases to get longer-term decreases? Any big picture comments you have on sort of what’s — what you plan to do in the field this year following what you did in the fourth quarter would be helpful.
Chris Doyle : Sure. The fourth quarter facility upgrade that we saw was really about short-term pain for long-term gain and enhancing flow assurance in the Delaware. We’ve done similar facility upgrades and tweaks already this quarter with minimal downtime. And so, we think that’s a one-off. I think importantly, as we think about Vencer and the integration efforts that have kicked off, much different than with Tap Rock and Hibernia. We have the platform in place. We have a leadership team in place along with all the supporting support staff that will drive a successful integration. These are assets that the team is very familiar with the basin that they’ve worked for a long time. I think we’ve shown as we’ve exited the year and moved into this quarter, assets are better in our hands.
And I’m excited to see what the team can deliver. I’m most excited to be able to accelerate the integration with Vencer and see what the assets can deliver. We don’t see any similar sort of one-off facility upgrades like we experienced in October, November. But this is also a team that’s going to look for every single way to optimize the business. Hodge, anything you would add?
Hodge Walker : Just adding a bit of color to Chris’ commentary. The work that was done there during the October-November time frame was really all about debottlenecking, optimizing flow assurance and minimizing downtime. And that work really was associated with some specific facilities and that’s behind us. And that’s proven by the way that we exited the year at 120,000 barrels a day for the month of December and the strong entrance into this year. The team is always looking for opportunities to optimize things. But at the same time, we will look for efficiencies everywhere we can.
Chris Doyle : In terms of cost structure, sorry, just getting to the second part of your question. We exited the year with all-in cash costs around 950 or so just over 950. That’s right at the middle of our guide for 2024. There are likely some synergies that have not been baked into that number with Vencer volumes coming over, but we feel very confident in how we exited the year. And as we lay out a very low and competitive cost structure in ’24.
Tim Rezvan : And then as my follow-up, I wanted to ask here in Colorado there was a proposal that came out recently, SB24-159, where some of the democrats in the state are proposing a phase out of drilling towards the end of the decade. I know it’s early stages, but can you talk about what you collectively as the industry are sort of doing in response to this proposal?
Chris Doyle : Sure. I’ll kick this off and then kick it over to Hodge. A similar push was occurred about a year ago. The governor came out very strongly in opposition of that measure. They tried to go through a ballot initiative, didn’t get the signatures, didn’t get the financial support. Here it comes again this quarter. We don’t think it’s going anywhere. We’re actively engaged at all levels within Colorado. And Hodge any additional color on where that sits today?
Hodge Walker: Yes. Kind of building off of that to your point on where the industry is. We with the industry continue to work with our — with the trades and work with the legislature. I think one of the things to note here is there doesn’t appear to be a whole lot of support sitting in the legislature right now. As Chris mentioned, last year, the governor came out against this bill. Earlier this week, he came out with his greenhouse gas road map. And in that road map, he mentioned that a production phase out at the scale large enough to make any meaningful impact would really drive up cost of living for many Coloradoans, which really can’t afford that kind of an increase to living costs. So I think that gives you a sense of his indication of where he stands, which is similar to where it was last year.
Operator: We’ll move next to Leo Mariani at Roth MKM.
Leo Mariani : I wanted to just follow up a little bit on the Permian here. It certainly feels like there could be a lot of low-hanging fruit from an operational perspective. I know you haven’t really baked in any efficiency in the 2024 program. But I was hoping maybe you looked out around a year or so from now. I mean, just trying to get a sense of what type of improvements could materialize? And could we see something like up to a 10% reduction, like D&C cost per foot? And are we also likely to see just improved EURs out there as well to get the double whammy. It feels like there’s kind of some low-hanging fruit here and I’m assuming you guys maybe have some internal targets about what you might do over say the next year.
Chris Doyle : I’ll kick us off here. I appreciate the question. I think first thing I would say is look how Civitas has managed and developed the DJ. And those lessons don’t necessarily stop at the border as we go south into the Permian. This is a team and a leadership team that is focused on returns. It is focused on continuous improvement and we are super competitive. Take that mindset into the Permian. We’ve built this — built out the team, and they have — they are very like-minded. What we were focused on in our ’24 guide is we’ve got to deliver this. There are many companies that have tried to do what we are doing and not been able to deliver. And so we did take rightfully so a conservative view into 2024. We know that the Permian is a different animal.
