Jim Teague: You understand what you’re talking about the 30-inch Bahia?
Jeremy Tonet: Yes, just give, sorry…
Jim Teague: We felt like that was the right size given what we see. What a lot of people, what I had Tony look into at sometimes is a damn Permian is how about 10 stack pays? Huh?
Tony Chovanec: Probably greater than that particularly on the Delaware side, Jim, it’s awesome…
Jim Teague: I mean and then I look at what somebody like Exxon CEO said about getting more efficient and getting better recoveries and I think we’re just scratching the surface and I think we’ll — one thing Jim Teague hates and Randy Fowler hates are empty assets and they won’t stay empty for long.
Randy Fowler: Yes. And Jeremy I what I’d add also and I thought the timing was good. Rusted Brazil a note that also highlighted end of last week, end of last week, Tony, you want to hit some of the…
Tony Chovanec: Yes. So look, when we look at our production forecast, the EIA actuals for what those words are worth are supposed to be out today or tomorrow. But if we go through what they have for actuals just through July, they’re showing 853,000 barrels of growth in crude oil production for this year so far. Now they’ve been a very, their data is very hard to set your watch to admittedly, but we had talked about 1.8 million barrels over a three-year period, 2022 through 2025 okay, and then people said well, and you know how do you gauge it year-to-year? And I said well, it’s hard to tell, but just divide it evenly. I’ll definitely take the overall 600 for 2023 without a doubt for crude oil additions.
Chaparral:
Randy Fowler: I would look at Enterprise and Permian assets as a portfolio and I think we’ve demonstrated what Jim said is that we use those pipes for how the market sees fit and I would expect us to do that going forward.
Jeremy Tonet: Got it. I’ll leave it there. Thank you.
Jim Teague: That was more of an answer than you wanted, wasn’t it?
Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Tristan Richardson with Scotiabank. Your line is open.
Tristan Richardson: Hi, good morning all. Just in the context of the NGL production outlook you offered and really how critical and unique the export complex is? Can you talk about the competitive landscape for NGL export capacity? I mean particularly now as some of your peers might like to enter this market either be it in M&A or organically?
Jim Teague: Hi, Tristan, this is Jim. Yes, we keep hearing that. We, I personally think and we made a mistake and maybe it was I made a mistake when we were the only game in town in that we went after pretty high fees when I wish we’d have gone after lower fees because we opened the door for competition. That won’t happen again. I don’t know how a Greenfield project competes with the brownfield project, especially when you have someone like Enterprise that’s going to be damn aggressive in holding market share or even growing it.
Tristan Richardson: Super helpful. I appreciate the context. And then you’ve talked about all of the folks at Enterprise are very focused and incentivized around Project 9.3. Can you give an update there as we near your end and really, more importantly, any thoughts yet on incentive targets or goals for 2024?
Jim Teague: 9.3 was never intended to be guidance, although every one of you guys took it as such. It was a goal. It was a goal. And I can’t remember the last time we missed meeting ago.
Tristan Richardson: I appreciate it. Thanks, Jim.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Jean Ann Salisbury with Bernstein. Your line is open.
Jean Ann Salisbury: Hi, good morning. There’s not really any Gulf Coast LPG export capacity being added until, like, mid-2025. Do you see export capacity getting tight over the next year and a half? And could that be a tailwind for you next year?
Jim Teague: Going to be very tight, Jean Ann.
Jean Ann Salisbury: All right. As a follow up, you obviously announced a lot of organic Permian G&P growth today. Can you talk about how you looked at the pros and cons of organic versus inorganic G&P ads in the Permian, there’s obviously a lot of options?
Jim Teague: With organic, you can build plants where you want them. And you don’t have to deal with some acquiring a company that has a hell of a lot of dedications to other companies. So, we just – we can build them where we want them and we control the liquids.
Jean Ann Salisbury: Cool. That’s all for me. Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Brian Reynolds with UBS. Your line is open.
Brian Reynolds: Hi, good morning, everyone. May be a question for Tony to follow up on some of the Permian fundamentals. Clearly, a lot of these new project announcements are predicated on Permian crude and NGL forecasts going forward. And Jim, you discussed some significant efficiencies that are expected in the Permian through this timeframe. So kind of curious if you can discuss how many of these efficiencies do we need to show up for these numbers to be realized, in your view? And then second kind of what does this imply for permitting rig count going forward? Just seeing that we have seen some weakness going forward, but the medium term outlook still seems to be intact. Thanks.
Tony Chovanec: I’ll start out when we did our forecast, we projected what activity was going to be. So Permian rig counts, we said, would range between 315 and 320, and they’ve ranged between 300 and 325, so not hard math there. For frac cruise, we estimated between 135 and 150, and they’re between 145 and 160. It’s producers’ behavior. And look, they’re our customers. We talk to them. We plan projects and capital hand in hand with them. So we have a significant amount of what I’d call institutional knowledge.
Jim Teague: Tony, let me ask, when your forecast, did you all build in any growing efficiencies? Or did you no…
Tony Chovanec: That’s a great question. We do not put a coefficient in there for growing efficiencies, and they’ve been growing for 10 years. I don’t know what stops them at this point. But, Jim, to your point, there are about 80 producers that have rigs working in the Permian basin today out of those 80, only 20 of them have five or greater rigs running. Okay? There is significant upside as far as that 60 producers that have less than five rigs running. There’s a lot of metrics you can look at, but that’s a simple one. That’s the reality.
Randy Fowler: And I guess, Tony, also the forecast that your team worked on did not assume a higher recovery of reserves.
Tony Chovanec: No, sir, it did not. It assumes historical recoveries, which are in the high single digits, Randy. Now, we all know that at least two majors have said that that is not how they are forecasting going forward.
Jim Teague: So [indiscernible] and all that would be using a Louisiana term, lan-yap, a little something extra, Brian.
