Operator: We’ll go next to Keith Stanley at Wolfe Research.
Keith Stanley: First, maybe I could start with the Haynesville just any high-level commentary on where you see volumes directionally on your system over the next year? Is it up meaningfully? Is it flattish? And any color on what producers are saying about how they’re approaching activity with the forward curve strengthening and some of the LNG facilities coming on?
David Slater: Sure. Why don’t I just start with the first question? We’re looking at volume growth. We’re expecting volume growth towards the back end of the year. That should click in post all the expansion. So, we have a series of LEAP expansions coming over the next 12 months. We also are in flight on a series of gathering expansions that and both those support each other. So, we fully expect our volumes will ramp as those projects complete and come online. What we’re seeing, I’d say, generally in the Haynesville from a number of our producers is rational behavior. With the current low cash prices, we’re seeing that pausing of activity or short-term deferral of activity, especially when you look at the forward curve, when you look forward to even as early as November, you have significant price ramping and going into the winter.
And then as I said in my opening comments, you’ve got Cal 24 in around $3.50 and Cal 25s in around $4, very healthy numbers for Haynesville producers to drill into. So I think the producers are being very rational. They’re seeing the way that forward curve is shaped, and they’re adjusting their activities and their behaviors to sort of match up with what the market is telling them that the market is telling them that they need to ramp production in ’24, ’25. And we’re sort of seeing them all positioning themselves to do that. And in a lot of cases, we’re seeing levels of drilling being maintained, but DUC inventory is growing. So I think producers are sort of building some torque into the system, if I could use that word, to be able to quickly adjust and react to what the forward curve is telling them in terms of price.
Keith Stanley: Great. Second question, maybe just a basic one on the CCS project. So can you talk to the time line, I guess, you’re planning to FID by the first half of next year and you’re expecting the Class VI well permit approval later in 2024. Can you just talk to confidence in getting full permitting for the project and how you would think about plans if permitting takes a little longer than expected?
David Slater: Great question. Permitting is probably the biggest question mark for anybody’s CCS project right now. So let me just back up. We’re having regular dialogue with both the EPA and the Louisiana D&R. As you know, there’s an expectation that Louisiana will receive primacy. There’s not clarity on the timing around when that may occur. So, we’re running this parallel track right now, keeping both agencies fully informed. In terms of our project, we’re laser-focused right now on derisking the project. So seismic shoot, what’s key to validate the character to characterize the geological formation we want to sequester in. Two, the Class V well permit and ultimate drilling of that characterization well later this year will be the next significant derisking activity.
Once we’re on the other side of that, then we expect FID the project early next year. Our best view on timing to get through the Class VI well authorization is kind of laid out in her deck on Page 7. And again, that’s our best view with the information we currently have. Is there an opportunity to accelerate that? We’re hopeful that there is, especially if primacy shifts to Louisiana. But I think all of that will be to be determined as we work with the regulatory agencies. And we’ll be committed to keeping everyone apprised as we get incremental information that could impact our schedule. We’ll be very transparent about that with everybody.
