Derrick Whitfield: Good morning, all, and I’d like to extend my congrats to Billy as well. Leaning in on the Utica, it sounds like the southern part of the trend could be advantaged on returns based on the elevated NRIs and potential geology. Could you perhaps expand on the difference you’re seeing in the geology between the north and the south?
Keith Trasko: Yes. This is Keith. So, yes, it’s still early in the play. We’re learning more every day about how the geology ties to production. It’s going to obviously vary over the 435,000 net acres. But in general, the Utica is thicker in the north. The south has a little bit better pay, but it has better geomechanics and rock properties. That has to do with frac barriers and keeping the frac energy more contained, near the wellbore. So, we expect as we gather more data, different areas are going to have different type curves. Geology is also going to drive the spacing too. But, we’re real happy with the well results in all of the areas. They’re exceeding expectations, generating great returns. And, we’re happy so far with these White Rhinos that are down in the south.
So, they’re still cleaning up. They’ve gone on for a couple of weeks. We’re seeing a little more liquid yield compared to the Timberwolf and Xavier. And you’re right, those do have the minerals, so they benefit from that and, we’ll be able to update you when we have a little more production data.
Derrick Whitfield: Great. And bigger picture question on the PRB Niobrara. Assuming further D&C optimization efficiencies based on your progress to-date, could this play compete with the Delaware and Eagle Ford over time in returns?
Jeffrey R. Leitzell: Yes, Derrick. This is Jeff. So, yeah, we’ve made a lot of really good strides there in the PRB. We started out really focusing in on that deeper Mowry really to refine our geologic models kind of throughout the whole section. And, we had good success with the Mowry with that. We went into package development last year and we saw with package development a really good uptick in overall productivity there about 10% in the Mowry. So, once we accumulated enough data, we went ahead and we’re moving up in section into package development there in the Niobrara and just really started drilling some wells this year, having really good success operationally, and we look to be bringing some of those on later in the year here.
So, in comparisons to the Powder and the Permian, I mean, there’s not many basins that are going to be like the Permian as far as overall productivity and results. It’s just a little bit different. But, there are some advantages up there. It’s got a really low F&D cost and there’s a lot of scale there. Obviously, we’ve got close to 400,000 acres and we’re really just focused in down on the South Powder portion of that. So, we’ve got a lot of expansion that we can take our learnings and we can move it up to the North Powder, which we’ve had some delineation wells and across the acreage from that aspect. So, we’re excited about it. It’s not moving as fast maybe as what the Permian Basin had, but we’re making really, really good strides.
The returns look great on it and the teams are continuing to make really good improvements from an operational aspect and we are seeing premium returns on that play.
Operator: Thank you. The next question from Nitin Kumar with Mizuho Securities.
Nitin Kumar: Hey guys, and congrats to, Billy on the retirement. Thanks for all the help over the years. I want to start off, Ezra, some of your peers have talked about refrac and the complete activity in the Eagle Ford. You obviously have a long history in the basin and obviously are, taking on the leading edge of technology. I just want to ask, what are your thoughts around refracs and could they compete with some of these new plays like the Utica and others on economics?
Jeffrey R. Leitzell: Yes, this is Jeff. We obviously keep our finger on kind of what’s happening with refracs and that technology out there. We’ve done tests in the past in multiple basins. And, what we really find is just with our robust inventory across our multi-basin portfolio, the opportunity for refracs, we’re much better to either go in and offset an existing completion that was maybe poor or lesser, or just go ahead and drill a new well in a new section from that aspect. And then, the other thing that I’d point out is, from refrac technology, I think there’s still a long ways to go. I mean there’s pretty crude approaches to where you kind of do some hail Mary fracs or have to install expensive additional casing strings and you never quite get the product activity uplift that you’re looking from an actual new well.
So no, right now, we see just a lot more potential in our existing inventory and the acreage that we have out there. We will keep an eye on the refrac technology and watch it advance and see if it has application, but we feel that going ahead and drilling a new well or an infill well is a much better investment.
Nitin Kumar: Great, thanks for the answer. I guess as a follow-up, we’ve talked a lot about gas macro today, but you have a pretty strong marketing arm. Are you starting to see demand pull directly from the producer, from some of the AI or Mexican exports or any of these, kind of, tailwinds to gas macro demand that you’re hearing about?
Lance Terveen: Good morning. This is Lance. Yes, I mean, I see it’s still pretty early on the AI front, but I’d say when you think about us, you’re right. I mean, we do have a lot of capability and a lot of reach with the marketing arm. We are very pleased with the execution that we have. We talked a lot you heard even Ezra talk about the pillars that we have there with diversification and control, the flexibility. All those things provide the reach that we need as we think about our price realizations and get into the most attractive markets.
Operator: Thank you. Our final question comes from David Deckelbaum with TD Cowen.
David Deckelbaum: Thanks for squeezing me in, guys. I just wanted to ask a follow-up just on the Utica, particularly as you fit into some of the analogs and other plays that you’ve been in, in the lifecycle of that exploration and development program. How do you think about testing longer laterals in the Utica specifically over time, which seems to be a play that’s quite amenable to even lateral lengths beyond three milers versus attempting to get down your footage cost sort of where are we in the theoretical innings there?
Jeffrey R. Leitzell: Yes, David, this is Jeff. We’re in the very early innings there and what I’ll say operationally is the Utica sets up I mean almost perfectly. The efficiency gains that we’re able to see there. We’re getting better with just about every well. And as, Keith had talked about in his opening statements, we drilled our longest lateral there to date at 3.7 miles. Our program right now consistently is three miles and the team plans on continuing to push that out just because we can do one runs in the laterals and stay on bottom longer and not have trip out of the hole and we really have no problems operationally completing the well. So, I think the plan looking forward as far as from longer laterals is, yes, we’ll continue to push the limits there.
We’ve got a lot of other drivers. It’s not just a cost per foot metric we’re looking at. There’s other movement that we have that we’ll be able to lower cost. But I would expect as we continue on with the operational successes we have, we will be drilling longer and longer there in the Utica.
David Deckelbaum: Appreciate that. And, just my final question, just as you think about the incremental few $100 million spent this year on strategic infrastructure and some other projects along the infrastructure side. How do you think about sort of the forward capital intensity of infrastructure as you continue developing in the ‘25 and ‘26 and beyond? Is that a number that should increase with intensity every year just given some of the infrastructure calls that are out there currently or is this sort of what you feel is like a steady run rate as a percentage basis?
Ezra Y. Yacob: Yes, David, this is Ezra. Yes, those are fixed projects, the strategic infrastructure that we’re talking about. And so, the best kind of way to look at it maybe is to reference that three-year scenario that we have out there. Now, that is not guidance, but it is a scenario that potentially assumes a similar macro environment to what we’ve seen in the last few years and what we could do going forward. And, what you see there is maybe not as much capital intensity, but what you see there is an expansion of our cash flow and our free cash flow. And, that’s really the thing that we focus on. And, that’s the important thing to keep in mind when we talk about these strategic infrastructure projects and something I highlighted before is that, when you can invest, we’re not aggressively seeking out these strategic infrastructure, these infrastructure projects, but when you have the opportunity to invest in something that offers a very compelling rate of return upfront and it gives you the margin expansion for the life of the asset that’s definitely an opportunity that we want to grab.
So one of the ways that we continue to lower the cost basis of the company, and it’s one of the ways that in that three-year scenario you see the free cash flow margins expanding.
Operator: Thank you. This concludes the question session. I would like to turn the call over to Ezra Yacob.
Ezra Y. Yacob: Thank you. We appreciate everyone’s time today. I’d like to hand the call over to Billy to wrap up.
Lloyd W. Helms: Thank you, Ezra, and thanks to all of you for your kind remarks and I truly have enjoyed the chance to meet all of you and work with you in the past. Let me just add, I’ve been blessed to be part of this company and its unique culture for the past 43 years, working beside so many talented people and watching the company grow and to become a leader in the industry. And, while I certainly will miss the daily interactions, I take with me incredible memories. And, I have great confidence in the leadership team and look forward to watching EOG’s continued success. So, thank you.
Operator: Thank you. The conference has now concluded. Thank you for attending today’s presentation.
