And that is – that will give them the energy security that ultimately is so desperately needed right now. So again, we think customers that are looking to play the spot market with this volatility, it’s going to get pretty exciting. And I think we can take away some of the volatility and still generates pretty great returns and create some really great win-win scenarios for customers.
Jeremy Knop: Yes. And let me add to that, Bert. I mean, look, I think we’ve moved from a world in the last couple of years, we’re playing defense and very programmatically hedging to a position being fully back to investment grade now with the low cost structure, one of the lowest amongst peers where we can much more opportunistically say, where do we see risk on the curve? Where do we see opportunity? And again, that’s why we keep trying to reemphasize how we’re taking a more tactical approach to hedging at the moment. So again, we’ve increasingly leaned into more hedges in the next 12, really nine to 12 months because whether the biggest driver’s winter during that time period, or whether that is a warm winter, a cold winter, a normal winter, prices could be up $0.50 to $1 or down $0.50 to $1.
We don’t see it materially moving probably beyond that, but that changes a lot as you get later into 2024 and into 2025, where relative to where the strip is right now and the other fundamental factors playing into it, the declines in production we expect to see start to really materialize in the Haynesville, in particular, combined with the pickup in LNG demand, which by the end of 2025, we’re modeling at about a 5 Bcf a day increase, and you have another probably 1 Bcf a day increase on top of that in the form of exports to Mexico. Another structural demand from things like industrial. That market looks increasingly tight with a backdrop of low DUC inventory and actually under-investment. And so when we see opportunities like that emerge, we want to provide investors exposure to that.
But look, at the end of the day, if I were to say, you don’t have a dynamic like that at play, I think our focus in hedging will be protecting just the fixed cost structure of the business and taking out some of the volatility associated with that. And again, in a world of high volatility, as I explained a few minutes ago that we’d expect to see in the future, there’ll be really great years and also some years that could be pretty tough like we saw earlier this year. And so we’d like to really take that volatility out. And if you think about the essence of what a lot of investors, high-quality investors, in particular, are looking for an energy right now, is durable cash flow and yield and price exposure, right? And so what we’re trying to do through our hedging program is really try to scope that exposure for those investors and provide that long-term runway where they can have that in the next five to 10 years.
We’re not trying to run a business that is just the highest volatility option on gas price. We’re trying to run it like a real business.
Bertrand Donnes: Those are a lot of great points. Thanks, guys. And then maybe shifting gears a little bit. It looks like you’re drilling slightly shorter laterals in 4Q versus 3Q, but you’re still completing or turning in line maybe some longer laterals. So could you talk if there’s a strategy shift there or if that’s just a quarterly blip and you’re still targeting longer laterals?
Toby Rice: Yes. We’re still targeting longer laterals. There will be variances quarter-to-quarter and that’s sort of what you maybe seeing here. But the strategy has not changed. The strategy to continue to leverage common development and unlock the scale of our asset base is still being top of mind and applied every day.
Bertrand Donnes: That’s perfect. Thanks, guys.
Operator: Thank you. Ladies and gentlemen, there are no further questions at this time. I will now turn the call over to Toby Rice for closing remarks.
Toby Rice: Thanks, Eric. This quarter marks another quarter where we’ve demonstrated some pretty meaningful steps to make the energy we produce at EQT cheaper, more reliable and cleaner for the world and also create value for shareholders. What was really great to see this quarter is really talking about how the differentiating aspects of our business, our low-cost structure, our scale, our deep inventory and environmental attributes are actually creating value and creating opportunities for our business that we are optimistic will present some really attractive investment opportunities for us in the future, and we look forward to keeping you guys updated along the way.
Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.
