Neil Mehta: Okay. That’s helpful. And then the follow-up is just on natural gas. I know it’s a smaller part of your economics, but gas prices have been under a lot of pressure. And in the Permian, we’ve been surprised to see associated gas supply up as much as it is two fees year-over-year. So just your perspective on how the gas market rebalances and the Permian in particular, do you see this as a structural challenge of continued associated supply or as we move towards more oil discipline gas markets can calibrate with it.
Travis Stice: I think generally, regardless of oil discipline the gas curves in the Permian Basin always exceed expectations. I think we’re always pretty conservative on the gas side. And that almost universally beats expectations, which is why you’re seeing on a basin level more growth than we all expect almost on an annual basis. So I think that’s going to continue, Neil. We don’t — we could run the gas price at zero in the Permian and still make great returns on oil wells. For us personally, we try to protect our gas price by through hedging as well as through some pipeline commitments to get our gas to bigger markets as well as protecting our basis exposure. But generally I think the Permian, even if you stay disciplined on oil, eventually you’re going to have to move to gassier zones and there’s a lot of gas and associated gas left to be produced in the Permian.
Neil Mehta: That makes sense. Thanks again.
Travis Stice: Thanks, Neil.
Operator: Thank you. One moment for our next question. Our next question comes from Arun Jayaram with JPMorgan Securities. Your line is now open.
Arun Jayaram: Good morning, gentlemen. Travis, Kaes, I’d like to know if maybe you could walk us through kind of the path to get to the $10 billion net debt target in terms of timing and how do asset sales, would that influence timing of reaching that target?
Kaes Van’t Hof: Yes, Arun, I think we kind of laid out in a $75 world generally the two businesses throughout the course of this year will combine to generate about $5 billion of free cash flow. And if we’re looking at a late 2024 close, just high level, half that number $2 billion to $2.5 billion will be used to reduce the cash portion of the purchase price. That kind of puts you in the kind of $12 billion of total net debt at close and with the business continue to generate more free cash in 2025, with the numbers we laid out. You could see that $10 billion number by middle of 2025. That excludes any asset sales or acceleration, and I think we try to be an under promise over delivered company, and there’s a lot of things that we can do to accelerate that outside of commodity price because I don’t think we want to put the entire bet based on commodity price. So we’re looking at what’s available to sell down in the next couple of months here and beat that target.
Arun Jayaram: Got it. And just maybe a follow-up. If you do plan to do something in the Delaware Basin, would you wait until kind of reaching close on the transaction or talk us through maybe the timing when you would contemplate doing asset sales?
Kaes Van’t Hof: Yes. I think we’re highly focused on deal certainty and getting the deal closed, and we’re not going to do anything that derails that process. So I think the Delaware Basin is great cash flow for us, great free cash flow and a very low decline rate. And we’ve reduced our capital commitments there and necessary wells we need to drill for lease holding purposes. So I think it’s a good asset to have for the time being and its good option value over the long run, but certainly not looking to do anything in the near-term.
Arun Jayaram: Great. Thanks a lot.
Travis Stice: Thanks, Arun.
Kaes Van’t Hof: Thanks, Arun.
Operator: Thank you. One moment for our next question. Our next question comes from Derrick Whitfield with Stifel. Your line is now open.
Derrick Whitfield: Yes. Good morning, all. Wanted to —
Travis Stice: Good morning, Derrick.
Derrick Whitfield: Wanted to start by really commending you guys for the leadership you’re demonstrating on capital discipline, as many of your peers are treating the environment as if it were naturally balanced today.
Travis Stice: Thank you, Derrick.
Derrick Whitfield: With my first question, I wanted to focus on the service environment. In light of the collapse in gas directed activity that is underway now and the preexisting lower utilization rates the service industry experienced last year, is there an opportunity to revisit service prices on some of the higher spec equipment?
Travis Stice: Yes, Derrick, good question. I think we expect that we’ll see some softening in the service market this year if the gas basins do kind of remain muted in their activity levels. We are not — we don’t set the price of the service market. We’re price takers. But we’ll certainly continue to push on our end on finding the market prices for all of our service lines where we don’t have existing commitments in place.
Derrick Whitfield: Terrific. And as my follow-up, wanted to touch on Endeavor, since you guys have been out meeting with investors since the deal was announced, are there any aspects of the transaction that are underappreciated in your view?
Travis Stice: I think the first question that came up was on the synergies of the $3 billion worth of synergies, most of those underpinned by our existing cost structure, applied to the Endeavor assets. And so those are usually the entry questions. But once we explained that the cost assumptions that we embedded are the same cost assumptions we’re currently doing today, a lot of comfort was gained, and then we went to the more kind of strategic questions with the shareholders. So I think probably the cost efficiencies were the first, and then secondarily, were some of the debt retirement strategies that case just went through were probably the two most topical questions that we dealt with.
