Luke Brandenberg: Yeah, it’s a great question. The way that we look at it, I’d say truth be told, it’s less of a plan of, hey, let’s try to get, one a year and increase, you know, from 25 to 50 to 75. It’s really more opportunity-driven. And so, our partners here, these are really unique opportunities in the sense that, we’re not here trying to replace your large private equity firms. That’s not the role that we play. It’s really for folks who are more focused on putting together kind of drilling in about drilling in and not the large format acquisitions. And there are several criteria that really make a good partner for us and allow us to be a good partner for them. A lot of these folks that they need to be proven money makers and that’s for two reasons.
One from risk management for us we know that they know how to build a business and know how to execute. But the other point is, we’re not necessarily covering all the overhead of these groups. So these are folks that are willing to put their own money in a deal, real substantial dollars. If they’re, five plus percent, we were running rig full time, and that’s over $5 million a year that they’re reinvesting. So it’s real dollars. So that’s the that’s a criteria. The other piece is, again, we’re not really competing with private equity in the sense of backing teams. And so a lot of this is really opportunity-driven. They’re not finding opportunities to keep the rig running full time. Those are multi hundred million dollar deals that are generally the world of the, the mid cap guys or the larger private equity firms.
These are kind of unit by unit. So when I look at next year, well, maybe let’s rewind. We anticipate running a rig basically full time next year, but we’ve been working with this team for over a year to get that drill schedule built out. So it’s today, we found a team, it was a great partnership. Both sides are really excited about it and we hit the ground running. They might have identified an initial opportunity, but you’re probably a year plus away from really running a rig full time. So that’s a bounce around with you there. But ultimately, I’d say it’s more opportunity-driven than it is a specific formula for layering and one every year. And, we’re talking to groups and in the Bakken in the Midland Basin. And in particular those are areas where I think there could be opportunities to put together units from folks that have had experience there and have deep relationships there.
But I wouldn’t anticipate next year’s capital doubling, even if we shook hands with the team today. That would probably be later next year to early ‘25 that you really put dollars to work with that second team.
John Abbott : Appreciate that color. And then the next question, I think, goes here to Tyler. And it’s really on liquidity and strategic partnerships as well. So, now the opportunity of the strategic partners is more control, more visibility on cash flow. But cash flow could be lumpier. And you have to spend money for these calls. You have to wait for them to come online. And so when you sit and looking at it looks like you increased your credit facility up to about 240 mil. So, I guess when you sort of think about the strategic partnership sort of model and you think about liquidity that you want to maintain? And how do you think about the possibility of further expansion to your revolver over time?
Tyler Farquharson: Yeah, so you’re right. We did increase our revolver by $90 million added liquidity post quarter. And you nailed it. That’s exactly why we did that. We wanted to get ahead of the big ramp up in strategic partnership capital that we expect next year. So I think we’re comfortable there in that kind of $250 million range that allows us to start to fund those strategic partnerships and gives us the opportunity to get to our half turn leverage target while still giving us enough capacity to where if we do end up getting a second strategic partnership, we’d have to go back to market to increase our RBL at that point.
