Kevin MacCurdy: Thanks. I think that clarity is helpful. And as a follow-up on the Eagle Ford, spending there has been a bit high this year. But in my take away from your CapEx budget is that it will be a little bit more efficient in 2024. Is that the right takeaway? And I respect you guys – that you guys are still nailing down the details, but anything you can share a high level on what’s driving maybe better efficiency in the Eagle Ford?
Clay Gaspar: Yes. We are certainly still nailing things down, and this is all preliminary based on the Board’s approval. But I think directionally, you’re right. We had looked at what is the constant two rigs for us to operate scenario look like? What does a one-rig for us to operate scenario look like? And then, of course, we’re working with our JV partners BPX [ph] on activity level for that side of the base in the Black Hawk side. And so I think what we’re working towards and we’re finalizing looks like a high-graded activity consistent with what we’ve talked about in the other basins. And you’ll see a really nice uptick in efficiency – capital efficiency from that. Now still bear in mind, I mean, we’re doing some really inventive things there.
We’re looking forward on a lot of projects. We’re not starving the asset of how do we create more value moving forward. That’s very important to us that we’re balancing the short-term wins with also longer-term value creation.
Kevin MacCurdy: Thanks a lot.
Clay Gaspar: Thank you, sir.
Operator: Our next question comes from Paul Cheng from Scotiabank. Paul, your line is now open.
Paul Cheng: Thank you. Good morning guys. Two questions, please. You guys have been indeed over there and that you have seen a lot of improvement. So if I’m looking out for the next one or two years, where is the area that you see the most opportunity for you to further improve? The second question is on the Bakken. You’ve been struck over there. I think from that standpoint, what have we learned from the RimRock acquisition in terms of future A&D, due diligence process and all that. And whether Bakken, given your substantially reducing activity what’s the role for your longer-term portfolio? Do they have a role there? Thank you.
Rick Muncrief: Hey Paul, this is Rick. I’m going to start, and then I’ll put it over to Clay and Jeff, but I’m going to start with that second part. I think one of the most interesting things we’ve learned with the RimRock acquisition, some of which was a little bit of a surprise, some was not. And that was our spacing RimRock and Devon that had historically somewhat slightly different development schemes, if you will. And I think what we have learned is it really drove home the point that Devon’s approach was probably the right approach as far as density per spacing unit. We were a little more relaxed. In other words, we had wider spacing and I think that’s why we had better recoveries. But some of those – sometimes those points aren’t really made until you have several years of production history, and I think that’s what we have learned with this.
The other thing I’d say is that we also have seen the impacts of something that’s not controllable, like weather. And last year, not too much or make excuses, but the fact of the matter is we had one of the worst weather events in that area in the last century. And so timing was not our friend at that time, but you just have to, I think, think through that as you execute, implement your capital program. So I think those are the things we’ve learned as far as I can assure you the Williston has an absolute place in our portfolio going forward. It’s an area we’ve worked in a long-time. We’ve had a great track record up there over the last decade, going back to the WPX days. And we see that continuing. We still see opportunities to even be better yet in the future.
So we’ve learned quite a bit from this and we’ve applied that. I can tell you, I personally challenged the team to step up during that period; sometimes that happens when you’re a leader, sometimes you push a little too hard. And I think that’s a learning for us as well. So Clay, what else you want to add to those questions?
Clay Gaspar: Yes. I’ll go back to kind of what are we excited about when we look at the footprint that we have today, as we think about innovation in that space, Paul, last week, I did a couple of days of intensive conversation did an off-site with my team. And we’re really focused on what distinguishes us two years from now, five years from now. And most importantly, what are the actions that we can take to ensure that exceptional performance. I think the two year conversations, there was a lot about recovery factor. How do we intent – how do we intentionally go after more of that oil that we already knows there. We sit in five amazing basins, have incredible land footprints already under our feet. And how do we think about extracting just a little bit more from the resources that we have.
So a lot about stimulation design, a lot about integrated approach, thinking like geologists and reservoir engineers and completion engineers all at the same time in extracting that value really leaning in some of the great work that we found around refracs, some of the other things that we have. And as we move towards five year really things start coming in more focus around things like enhanced oil recovery, how are we progressing those learnings. And again, leveraging the amazing footprint that we already have today, how do we enhance that ballpark 10% recovery to 12%, 15%, 20%, essentially doubling the resource that we have. Specifically, the learnings around the acquisitions that was a little bit more than a year ago. We’re still a pretty fresh team.
I can tell you, the acquisitions were fantastic. Value-creating opportunities for us. They fit the portfolio. And what we really learned is that we need to do a better job in the process of the handoff and how do we pick those opportunities up. When these companies, the prior owners may have a little different mindset on how far ahead they are on infrastructure, on permitting, on how they manage the day-to-day operations things like ESG or a very high important factor to us. So moving through that kind of – that transition period, I think we have gotten materially better from the first to the second and when the third one comes, we’ll make another material improvement. So real pleased with the team, the work that David’s team, the greater team does in that evaluation.
We’re in every day to the room, we’ll look hard at everything. We keep an exceptionally high bar and we’ll continue to get very much better on that handoff and really improving the ultimate value from these opportunities.
Paul Cheng: Thank you.
Operator: Our next question comes from Scott Hanold from RBC. Scott, your line is now open. Please go ahead.
Scott Hanold: Yes. Thanks. I think this one is for Jeff. And just to be a little bit more pointed on the kind of the buyback kind of theme. Your stock is down circa 30% year-to-date, certainly underperforming the peer group by quite a bit. Like why not do buybacks in the third quarter? I know you – obviously, the stock is bit down here in the last, say, week or so, but it had points during the third quarter to where it was at similar levels. Just kind of curious why not 3Q and more so going forward.
Jeff Ritenour: Yes, Scott, you bet. The answer for the third quarter is real simple. As you’ll recall, at the end of the second quarter, we disclosed our cash balance a dip below $500 million. As you might recall, when we rolled out our framework three years ago, one of the key criteria was that we maintain a cash balance in excess of that $500 million level. So our first priority was to take care of the maturity that we had in the third quarter. Second priority was to build back our cash balance above that $500 million level, which, as you saw in our reported results here in the third quarter, we’ve done that. So that married with our commitment to deliver on the variable dividend that we talked about in the previous quarter.
