Doug Leggate : So I’ll just ask, I think it was the case. I think you did touch on the M&A line of sight. I wonder if I could just dig into that a little bit more, particularly on the remaining asset sales and whether those are midstream weighted? Do you see additional opportunities in front of you that are midstream rated? And if so, are you basically looking to pay back your main exposure? I guess I’m really trying to understand how that impacts the cash flow of E&P business?
Kaes Van’t Hof : Yes. Good question, Doug. I would say, generally, we were surprised at the amount of E&P assets we sold relative to initial expectations of $500 million of noncore asset sales because we raised that to $1 billion. We’re at $750 million to date. It’s logical that most of those — most of the rest of the $250 million or more come from noncore asset comes from midstream assets. I will say if they’re — it’s going to be harder for us to sell operated midstream assets versus non-op midstream assets like the JVs that we highlighted in the back of our deck like you inferred, operated midstream assets do have an impact on LOE and financials. Whereas non-operated assets, you do have a cash flow impact from less distributions from those assets, but not as meaningful to the parent co.
So I think it’s logical that more non-op stuff is top of mind, but for the right value, some operated stuff would be on the table. Just we’d be cognizant of what that would do to our operating metrics.
Doug Leggate : Okay. I guess we’ll watch and see how — the raise is obviously a positive. So thanks for the clarification. Guys, I apologize for being predictable. I’m going to put myself in the cross-hairs a little bit and go back to the cash tax question because it’s through a sort of bit of a loop, to be perfectly honest. But it’s about 50% bigger than the P&L tax. And what we are trying to figure out is, when E&P kicks in, which I guess would be the end of this year because you’ll have had $1 billion of earnings presumably for three consecutive years, what in the $45 million of deferred tax, it’s about 1/3 of your free cash flow, what do you think the normalized level of deferred tax would be if the conditions were the same? Is that an easy question to answer?
Kaes Van’t Hof : Yes. I mean, I guess the answer would be, we’re going to get through all of our NOL in 2023. So that will be exhausted, and we’ll be a full cash taxpayer, although as you mentioned, we will be able to defer some with respect to intangible drilling costs and the CapEx we spend on the business. So I guess it will be dependent upon where — obviously, where commodity prices are in 2024. And second to that, where CapEx is, I think we’re obviously in a world where we’re going to be spending — continue to spend less than we make. So it’s logical that there will be a tax burden. There’s just too many variables right now to predict 2024.
Operator: With no further questions, I would like to hand it back to Travis Stice, Chairman and CEO, for closing remarks. Travis?
Travis Stice: Thank you, again, to everyone for participating in today’s call. If you have any questions, please contact us using the information provided. Thank you.
Operator: Okay. That’s it for today’s conference. This does conclude the program. You may now disconnect. Thank you.
