And against that backdrop, we are pretty thrilled to be adding 2.2 million tons of offtake on the West Coast of Mexico. That’s obviously pending successful FID by Mexico Pacific. But you’ll recall, at AIM, we mentioned that we’re really interested in adding West Coast LNG into our portfolio. This particular facility adds diversity to our offtake options. It avoids the Panama Canal. It’s supportive of volumes into Asia. And from a supply perspective, it really does complement our offtake from Port Arthur very nicely. It creates some excellent optimization opportunities. You probably noticed it’s got strong backing from very credible counterparties in addition to ConocoPhillips, and it supports a dedicated pipeline from the Permian. So that’s always appreciated.
It provides further takeaway optionality from the basin, which I think is helpful for Waha pricing. And it also is using ConocoPhilips’ optimized cascade technology. So there’s quite a few reasons why we like having capacity at Saguaro. Now note that it is an offtake agreement. There is not an equity component to this one. It is simply offtake. And I think the most important point that Ryan has already mentioned is we can — to see really strong demand for LNG, and so this fits quite nicely as we’re kind of laddering our build-out of market and supply.
Stephen Richardson: That’s great color, Bill, and Ryan. Bill, I was wondering if I could just follow up quickly on Surmont. It’s been a little while since you exercised, but wondering if you could give us your latest thoughts on funding of that transaction and how you’re thinking about it.
William Bullock: Yes, I’m happy to. So let me just start with some overall context to how we’re thinking about our cash balances and the acquisition of additional 50% interest. We ended the second quarter with a little over $7 billion of cash and short-term investments. And as we talked at AIM, that really provides strategic flexibility. It supports our investments in these mid- and longer-cycle projects in our shareholder distribution commitments. And when we look forward at the current strip, we expect that our organic sources and uses for the remainder of the year are going to be pretty balanced, Steve, and that our ending cash absent Surmont would be flattish with what we’re seeing right now. Now as Ryan mentioned, Surmont is a long-life asset.
It’s got a really great resource base, and it’s one of these ideal assets to think about funding with debt because of its long-dated cash flows. You can match your assets and your liabilities pretty well with something like this. So for the Surmont to transaction specifically, and it’s a bit tactical, but it’s likely that we will use debt for a majority of the funding for Surmont. And then I’ll just wrap up by pointing out, Ryan said in his remarks that the pricing that we’re seeing right now. We see strong incremental CFO from that 50% increase in working interest Surmont. That’s starting to approach $1 billion of incremental CFO next year at $80. So we’re quite happy with the Surmont acquisition and quite comfortable with our funding plans.
Operator: Our next question comes from the line of Doug Leggate with Bank of America.
Doug Leggate: Dom, I wonder if this is probably for you. I want to follow up on the question about well performance productivity, the terrific product production performance, the raise that you’ve introduced today. But I want to ask it a slightly different way. Your partner in the Permian — specific to the Permian, I should say, has been talking about, I don’t want to call it some magic formula or sauce or whatever, but the well productivity is off the charts, and you obviously are a big beneficiary of that. I’m wondering if you can comment as to whether there’s any osmosis towards Conoco’s operated production. And if you could maybe contrast and compare any differences you see between your 60% ownership position in the JV and your legacy position in the operated area around the Conoco assets?
Nicholas Olds: Yes, Doug, this is Nick. I’ll take a stab. I think you’re looking at the non-operated versus operated split. Is that where you’re going with?
Doug Leggate: Basically, yes. Exactly right.
