I think what we tell you is that that is our goal, is to tell you that we don’t plan on spending as much money on acreage procurement as we have in the past. It tells you that probably half of our acreage that we own right now is Western Haynesville, the other half is a core, and it tells you that we’re not inventory starved. So we don’t have to do deals in the market, whether gas prices are high or low, in order to buy inventory. So then you come and you look at the cost and we look at deflation. I mean, Dan goes over some of the cost savings that we’ve had from the Frac company so far and some of the cost savings we’ve had in drilling and completing the wells. I think all we can do is tell you that we’ve looked at those numbers. We’ve looked at hedging.
We’ve hedged about 28% of our production in ’24 to 355 swap. I think that we need to be in the 50% range now. When will we get there? I don’t know, but I think you and the market need to know that it is a corporate goal that we have. And the reason we use kind of batting down the hedge as a theme is because if we need to delay some fracs, we see that in the next month or so, then I think we can do that. If we needed to lay down another rig, we’ll have the optionality to do that. So again, I think your goal is, how are you going to protect this thing? And that’s one reason I always say, if you look at the major shareholder, who owns 65% of this, if anybody’s trying to protect it, the Jones family is, and they’re well involved with what we do.
And then I think you have to look at any minimum volume commitments or farm transportation agreements that you have and say, are we impacted by reducing the rig count? And the answer is, we’re not. So you have to look at all those things too when you ask that question. But we’re going to continue to manage this just like we’ve managed it for a while. We as a group, we recognize pain. I mean, some groups haven’t recognized it because they haven’t experienced it, we do, so it’s a good thing. It’s an indicator, and whatever we need to do to ride this ship, that’s what we plan on doing. So, that’s a great question.
Charles Meade: Thank you for that elaboration. That was helpful, Jay.
Jay Allison: Yes, sir.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Fernando Zavala from Pickering Energy Partners. Your question, please.
Fernando Zavala: Hey, guys. Good morning. Kind of going back to your comments around evaluating dropping another rig, where would that rig come from? Would it come from the Western Haynesville or the core Haynesville?
Jay Allison: If we dropped another rig, it would be in the core, it would not be the Western Haynesville.
Fernando Zavala: Okay, got it. And then, can you talk a little bit about — this is my follow-up, the trajectory of production in 2024? It seems like the implied 2024 guidance is in line with first quarter, so just a little bit more color there.
Roland Burns: Yeah. From a — if you think about the time frame related to dropping a rig and starting to show up in terms of impacting production, Dan mentioned, we were dropping the first of those two rigs here this weekend and the second rig within the next two to three weeks I think he said, and so just like when you add a rig, when you drop a rig, there’s plus or minus a six or seven-month lag between the timing of changing your activity level and having it flow through to production. So that’s why — the first half of the year, production should remain relatively flat, and you start to see a little bit of a decline in the third quarter and a little bit larger decline in the fourth quarter as you start to feel the full brunt of running five rigs.
Fernando Zavala: Okay. That’s helpful. Thank you.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Jacob Roberts from TPH&Co. Your question, please.
Jacob Roberts: Good morning.
Roland Burns: Good morning.
Jay Allison: Good morning.
Daniel Harrison: Good morning.
Jacob Roberts: I think previously you’ve had some commentary about joint commitments and HPP provisions on the Western Haynesville, can you speak to the impact of running those two rigs for 2024 and any needed extensions or perhaps catch-up provisions to be needed in 2025 plus?
Daniel Harrison: No, we feel like that not running the three rigs like we originally anticipated this year that that’s not going to put us that far behind and we won’t really have to alter our future plans by taking this a little bit slower approach in 2024, but over a longer period of time, we have a lot of acres to — the term acreage that it has to be — we have to drill to hold. But given the actions we’re taking this year, we’re not really changing — having to know that we have to extend leases, et cetera, we still can keep all these kind of on track.
