Roger Read : I’d just like to maybe dive into the gas takeaway question and how you’re — I understand how you’re positioned not to have Waha basis risk for the most part, but what are you looking at in terms of flow assurance this year and to the extent you can say next year?
Kaes Van’t Hof : Good question, Roger. I don’t think flow assurance is going to be an issue for us, but we are exposed to the Waha price based on how the contracts are written. Through the history of Diamondback, we’ve been very acquisitive, and when we acquire things, it comes with contracts. And so, all those contracts are with private equity backed or some of the public gatherers and processors in the basin. So I feel really good about our flow assurance and our contracts, the issue is going to be price. And what we’ve seen in the basin is some tightness coming out of the basin on Waha when pipelines have gone up or gone down over the last six months. But really, there’s a lot of processing capacity that’s now coming on in the early part of 2023, particularly with two of our Midland Basin gatherers and processors.
And I think that generally is going to move the issue further downstream. So it’s going to be a tight gas market in the Permian. Henry Hub prices obviously aren’t helping as well, but we feel good that the gas will move, and we’re well hedged financially to protect from that downside.
Roger Read : Appreciate that. And the other question I wanted to follow up on — I am just looking for the right page, yes, Page 23 on the hedge summary. Any thoughts on — if we look at where Q1 has hedged, Q2 really kind of similar, is that what you’d want to do ultimately for the back half of the year as we draw in closer and it becomes more financially reasonable to do that? Or are you, at this point, more comfortable going a little less hedged just given the overall structure of the balance sheet, presumably with these dispositions coming, a little more cash coming in?
Kaes Van’t Hof: Great question, Roger. We don’t believe in no hedges, I think, primarily because our balance sheet is a hedge. Our cost structures are hedged, but we consider our base dividend debt, right? And our base dividend is now $3.20 a share. It’s almost $550 million of outflows a year. We think it’s well protected today at $40 a barrel but we don’t want to put that in harm’s way. So we buy puts as fire insurance, and we basically use the front quarter to extend duration three or four quarters out. We try to be 50% to 60% hedged going into a particular quarter on oil down to 0% hedge four, five quarters out. So I think you can continue to expect us to do that, and your observations are 100% correct that in the back half of the year, it will grow as we go through the year.
Operator: Our next question comes from from
Unidentified Analyst: Just a couple for me, follow-ups on the service cost environment and Diamondback read-through specifically. I guess, first, I appreciate the comments on what you’re watching for and how Diamondback is positioned to really maximize what you all can control. But I wonder if you could speak a little more broadly to what you’re expecting in terms of year-over-year changes on inflation. I think the materials speak to 15% as the base case and really more so how that compares to what you’re seeing on a leading-edge basis? And then I guess last one is, how we should think about the balance of the CapEx guide for this year in that context? And then the second part of my question is, just looking for a snapshot of well cost today on a per foot basis are tracking relative to the full year guide range and also relative to the mid-November snapshot that we got in last quarter’s earnings?
