Dominic Macklon: Thanks, Sam. It’s Dominic here. So it is a bit early for us to be talking about 24%, but there hasn’t really been any change since — to the long-term framework we’ve had and what we talked about at AIM back in April. We showed there an expected capital range depending on how oil prices and inflation was trending. Given that WTI is back to around $80 and the forward curve is about there as we have been anticipating, frankly, we’d expect to be at the higher end of that range that we talked about back in April. So a similar capital level for next year to this year. I think one other dimension I’ll talk about is how much growth in the Lower 48, what amount of growth do we need as a company do we want. Well, that’s always an outcome of a plan.
We’re always focused on returns, of course, returns on and of capital. But one of the things we’re looking at next year is do we keep Lower 48 relatively flat, it’s performing very well this year, or do we add a little bit of activity. That’s one of the things we’re thinking about. In terms of the longer cycle capital, yes, LNG spend is — will be rolling off from this year over the next few years just as Willow picks up. We expect our longer-cycle capital to average around $2 billion, pretty flat for the next few years here. So that would probably give you the pointers in terms of the general direction for next year. It’s like I said, it’s pretty early, but that gives you a good sense of where our heads are at on that. So…
Sam Margolin: Understood. And this is a follow-up on your point on Lower 48 and particularly sort of the phasing of your development because now with Mexico Pacific, and Port Arthur, you’ve got quite a bit of evacuation from North America for gas. It integrates with your marketing team and through the supply agreement, which you talked about the AIM. And I wonder if — thinking about those projects and their impact on maybe even NPV of your — of some of your Permian positions with respect to realizations is a factor or if these are evaluated for you totally separately.
Dominic Macklon: Yes. I mean we don’t really relate those investments specifically and directly, but it’s obviously all helpful in terms of demand for North American gas. So that’s in our minds, certainly as we think about the overall value equation of LNG in North America.
Operator: Our next question comes from the line of Devin McDermott with Morgan Stanley.
Devin McDermott: So I wanted to build on what Sam was asking about, some of the comments you made just on inflation or deflation trends. You had some benchmarks baked into the multiyear guidance at the investor meeting earlier this year. We’ve seen some signs of deflation in U.S. shale and some still rising costs in other pockets internationally. On a net basis across your portfolio, I was wondering if you could talk a little bit about the trends you’re seeing here in the back half of ’23 and then how that plays into the 2024 outlook to the extent you can comment.
Dominic Macklon: Yes. Thanks, Devin. Dominic again here. So obviously, something we’re watching incredibly closely with everybody else in the industry. I think we are seeing some areas of deflation in the Lower 48 going in the second half. I would say, however, we still expect our overall company capital inflation to average out in the mid-single digits this year versus last year on an annual basis. But just to talk a little bit about what we’re seeing. I mean, certainly, I think as we’ve said before, tubulars, we’ve seen some significant price relief on any oil price-related commodities, fuel and chemicals and things. We’ve seen some material reductions in sand and proppant. Rig rates have softened a bit, and that’s obviously driven by the gas basin.
So you’re starting to see some high-performance rigs come in and compete with the oilier basins. So that is — we are seeing some day rates come down there. And I would say I think we are beginning to see some examples of frac spread rates coming down in some basins. So that’s all looking positive. Activity internationally and offshore is picking up. It’s probably as high as it’s been for many years. So we are seeing some pressure on labor rates there. So we’re watching that. But overall, certainly seeing some deflation going into the second half, and that’s a big part of the reason we see a lower capital run rate for the second half for the first half. That’s an important part of it. And that’s all reflected in our annual capital guidance that we have narrowed to $10.8 billion to $11.2 billion, $11 billion still on midpoint.
