Johnny Black: Charles, this is Johnny speaking. So, the Crestwood Niobrara preferred is an asset level preferred that’s held by three institutions today and represents about a $435 million liability that pays 10% today, and can be redeemed by the holders beginning in January of 2024. Our desire is to start removing that security from our capital structure over time to lower our cost of capital, as I mentioned in my previous comments, and really try to remove the structural complexity that’s created by that asset level preferred. But also balance that, as you mentioned, with our goal and major main financial priority, preserving our attractive leverage metrics over the next few years. So with that in mind, actually, we filed an 8k at the end of last week on Thursday of last week, where we executed an amendment with the preferred holders, that gives Crestwood, the flexibility and optionality to partially redeem a portion of the security at the beginning of next year.
We now have the option to redeem roughly 255 million in security, or approximately 59% of the total at par in January of 2024. In return, the preferred holders have agreed to roll their remaining $180 million of the security or roughly 41% of the existing security for another two years at a slightly higher cost of capital going from 10% to 11%, beginning in 2024. So generally, Charles, we think this is an attractive solution to optimally address the upcoming liability as it mitigates our financing need, locks in some of the attractive capital for another two years. And also allows our business to importantly continue to naturally delever over the next few years from the growth and free cash flow profile of the business and build the balance sheet capacity, to ultimately take it all the way out here in a few years, and fully eliminate the structural complexity created by the asset level press.
Operator: Since there are no further questions at this time, I would like to turn the floor back over to Bob Phillips for closing comments.
Bob Phillips: Thanks, operator and thanks to all of you for staying with us this morning. We are disappointed in the financial results of the quarter but we’re very, very optimistic about the future. As I look at this quarter, it’s a short-term negative lower commodity prices which are clearly improving in the third quarter and should continue to improve throughout the second half of the year, as well as some short-term shut in production on Arrow, which we think will come back on over time as producers get around to getting those wells back in service again, offset by some very strong long-term trends. The rig activity around our assets still remains very strong in 13 rigs, seven in the Delaware, four in the Bakken, and two in the Powder.
So we continue to have strong producer activity on our systems gives us great visibility to volume growth throughout the second half of the year. And next year. Our well connects are running at our schedule, which is a pretty good feat given all the things that have happened both weather as well as shut-ins as well as commodity volatility. A lot of our wells, many of our wells are outperforming their type curve. And so that is a strong indicator of the quality of the rock that we have dedicated under long-term contracts with our producers. And then finally, we haven’t talked about it a lot. But clearly there’s going to be a big benefit in our ’23 capital program as we expand in gathering system compression, and reaching out and expanding the geographic scope of all of our assets into new areas to capture undrilled inventory in the future.
So a lot of things to be excited about in the future. And with that operator, will thank you all for joining us today and that’ll conclude the call.
Operator: This concludes today’s teleconference. You may disconnect your line at this time. Thank you for your participation and have a great day.
