Donovan Schafer: Okay. And then turning to Chaveroo, some language jumped out at me in the release saying — and I know you guys have secured these, a lot of different locations that you can participate in, so it’s not new per se, that it’s something you’ve been — that you want to do this or like having it on the table. But in the release, the language you say, that your plans are to systematically participate in the remainder. So beyond, we’ve got four and going back two, and then another six, and then yes, the Company also expects to systematically participate in future development blocks, holding rights to over 69 additional horizontal locations in aggregate. Is that — talking about systematic participation, does that signal or indicate any kind of a flipping of a switch or something where you kind of feel like you’re — of course, if things change and you start to get some bad well results, something you’ll reassess, but does that kind of indicate you’re at a point where you’re kind of feeling like due is we’re kind of ready to run with this, at an appropriate pace for dividend support and so forth, but just that you want to keep doing these over and over?
Kelly Loyd: Yes, honestly, is the answer to that. It’s — we’ve got more data, we’re more comfortable than we were. Look, everything is subject to change. But as of now, we intend to systematically keep going with it. So yes, is the answer. Excited about it.
Donovan Schafer: Yes. Am I right in kind of picking up on that language, like systematic participation is kind of suggesting a feeling or a reaction to how things have been going that’s a step forward or a step incremental, the initial kind of toe in the water?
Kelly Loyd: Yes, more confident than let’s wait and see like what maybe we were before. Now it’s — yes, absolutely. Good catch.
Donovan Schafer: Got it. Okay.
Operator: [Operator Instructions] Our next question comes from John White from ROTH Capital. Please go ahead with your question.
John White: Congratulations on closing the SCOOP/STACK and getting your Chaveroo wells flowing back. Very nice additions to the portfolio. Wanted to see about additional detail on the SCOOP/STACK. Primarily, is the — where is the acreage? What counties in the Anadarko Basin is the acreage concentrated in?
Kelly Loyd: So, I can answer that, or Mark. But I mean, it’s in various places throughout the SCOOP/STACK. I would say it’s got a large concentration over in Grady and Garvin. Those have kind of been the focus on where most of these wells in progress are.
John White: Okay.
Kelly Loyd: I mean, purely — look, it has — excuse me, Blaine, Canadian, Carter, Custer, Dewey, Garvin, Grady, Kingfisher, McClain, Stephens. It’s the whole SCOOP/STACK. But the biggest concentration and where the most activity is, over there, in sort of Grady and Garvin right now.
Mark Bunch: Basically, John, this is Mark, it’s kind of near where Norman is.
John White: Yes. I know where Grady County is. I’ve driven around there a lot. So, it’s pretty spread out across the Anadarko.
Kelly Loyd: Yes and no. Like I said, it’s sort of more concentrated in that Grady — Eastern Grady kind of area. But yes, we do have various species throughout.
John White: And is there a concentration of operators or is that pretty diversified too?
Mark Bunch: There’s — we have a big position with Ovintiv and Continental. There’s some with EOG, Marathon, Gulfport. It’s — there’s probably, in total, somewhere around like realistically around 20 operators that we’ll end up dealing with. But those — the ones I mentioned are the major ones.
John White: Those are good names.
Mark Bunch: Yes. Some Continental Resources too, sorry.
John White: It’s a big one. No, you mentioned it. And what is the primary formation being targeted?
Mark Bunch: Mainly like the Woodford, but they also look for the Sycamore, anything in the Mississippi. The way they pool, there is a pool of a larger section. So, a lot of times, this section is pretty good size that they pool.
John White: All right. So, 640?
Mark Bunch: Well, actually, the — a lot of them now are getting to be 10,000-foot laterals. So, they’re actually going to be 1,280s.
John White: I know you don’t give guidance, but with the initial results from SCOOP/STACK and obviously the Chaveroo results, is the feeling we should see your percentage of oil cut of total production increase over time?
Mark Bunch: Yes, John, yes, you should see that because both of them are, especially Chaveroo, is really oily. And SCOOP/STACK is oilier than our current mix.
Ryan Stash: Yes. The only caveat, John, would just be we obviously still have more insight into Chaveroo timing and drilling in the SCOOP/STACK, depending on what happens with gas prices, we could see some areas that have more gas content get drilled. Right now, they’re focused more on the oil and liquids areas, which makes sense, but there is some gas there, too, right? So, there’s a little bit of TBD. It depends on what the operators drill.
John White: Okay. Thanks for the additional detail. I really appreciate it and I’ll pass it back to the operator.
Operator: [Operator Instructions] And ladies and gentlemen, I’m showing no additional questions — actually, we do have an additional question. This comes from Bruce Brown from Brown Capital. Please go ahead with your question.
Bruce Brown: Thanks for the good work. I just had a — I know you’ve given no real guidance, but I’m just wondering, if prices stay right around where they are today for like the next 12 months, which is probably not going to happen, but let’s assume it does, would your asset-based lending line be paid down significantly?
Ryan Stash: Yes. So, thanks, Bruce. Obviously, we’re not saying guidance. So really what we’re looking at, and to answer your question is the balance of paying down our line versus capital, right? And one of the big unknowns obviously is how much capital we’ll have in the SCOOP/STACK given pricing. I would say we’re generating enough cash to significantly pay down, but we may choose to spend more and reinvest in CapEx and pay the line down a little bit slower. But we’re certainly going to remain below our target of one-time EBITDA. And as I mentioned, from a cash flow perspective, yes, we’re generating plenty of cash to be able to pay it down if we wanted to. We do have capital projects that we think are really attractive that we’ll probably put some capital too as well.
