Kaes Van’t Hof : Good question, Jeoff. I think, generally, we guided to this year being around 15% year-over-year well costs, sub-10% from what we highlighted in November. And I would say, generally, those numbers still fit today. I would say, we’re probably in the upper half of our well cost guidance for both Midland and Delaware today. But generally, there are some things coming our way outside of service cost deflation and that’s another Halliburton Zeus e-fleet moving to four simul-fracs versus last year, we ran three in a spot crew. So that last simul-frac adds some efficiency. And I kind of put the budget two ways this year. I think if we see deflation, we’re going to be closer to the lower half of our guide. And if we stay flat, we’ll be to midpoint to the higher end.
But I think generally, the anecdotes are coming in that some things are heading our way from a service cost perspective. And unlike last year, not everything — not every line item will go up in the AFE.
Operator: And our next question comes from Scott Gruber from Citigroup.
Scott Gruber : I want to circle back on the completion efficiency comments. E-frac obviously brings a pretty good fuel savings given the gas diesel spread here and obviously, associated ESG benefits. But do you think e-frac additions will be additive to the improvement in cycle times above and beyond what you’re seeing from simul-frac?
Kaes Van’t Hof : I think, generally, Scott, they complete a similar amount of lateral feet as the simul-frac crews as we’re seeing early time. But on top of that, e-fleets on a fuel efficiency basis, not just the type of fuel, but the efficiency of the fuel used has been a positive surprise. I think the last thing I would add is that it does operate on a much smaller footprint. So maybe your moves are smaller, but you do have some electrical infrastructure associated with those fleets. Dan, do you want to add anything on that?
Danny Wesson : Yes. I think we’ve only been running the first crew for about six months, and we’ve been really impressed with the performance thus far. It’s outperformed our other fleets kind of on the margin, but not too measurable. We do believe that over time, you’ll see that gap widen in performance, just really believe that the maintenance required around the e-fleet equipment will be substantially less. So we’re excited to learn through that with Halliburton and recognize some added efficiencies on top of just fuel savings as we go forward.
Scott Gruber : And if service costs do start to slip in the Permian with Haynesville rigs and frac crews coming out migrating over, how quickly do you think that will hit your D&C costs? If that starts to kind of pivot here in the near future, is there an ability for you to realize that in the second half? Or we really talk about the 2024 benefit just given your contracts kind of in place at this juncture?
Danny Wesson : Yes. I mean we don’t really have any long-term contracts in place. We kind of have shorter cycle pricing agreements I think generally, we’re exposed to market pricing across the board, and we certainly have some protections in place on some of our consumables, but if we start seeing the market soften, which we feel like is a pretty good likelihood with where we see gas prices today, that should trickle down into the oil basins, particularly on the drilling services side of things first. And we’ve certainly not seen a lot of upward pressure on pricing in the first part of this year. It’s been pretty quiet, and hopefully, we’ll start seeing some help on the inflation front here through the second and third quarter.
Operator: Our next question comes from Kevin MacCurdy from Pickering Energy Partners.
