So, yes, I think to the extent that the second half of the year perhaps has more free cash flow, you might see us be more active, but we’re going to be opportunistic. And if there’s opportunities to grab value like what we saw in the first quarter, for example, we would certainly take advantage of that. So I think that’s our plan, but we’re going to keep it a bit flexible as we move through the year.
Zach Parham: Thanks, Michael. Thanks, John. I appreciate you taking my questions.
John Reinhart: Thanks, Zach.
Operator: The next question is from the line of Tim Rezvan with KeyBanc Capital Markets. Please proceed with your questions.
Tim Rezvan: Hi. Good morning, folks. Thank you for taking my question. I wanted to follow up a little bit on the midstream opportunities you have for the Ohio Marcellus. I wonder if you could give an update on kind of where discussion stands now that you have four months of production data from this pad? And maybe, you know, how we should think about the pace of development? You talked about 50 to 60 locations, you know, maybe how many pads you might look to drill in 2025 and just sort of how the midstream and activity will kind of mesh as you go forward?
Michael Hodges: Yes. Hi, Tim. This is Michael. I’ll take the first part of that question, then John or Matt can jump in on kind of development pace. But on the midstream side, you know certainly, you know, we’re involved with a number of counterparties in the area that have available capacity for both gathering and processing in this area. So we feel like we’re in an advantaged position there. There’s, you know, there’s capacity that was left over from times where more gas in the region was flowing. And so, you know, we’re looking for the best economics, of course, and also need to be able to assess, you know, on this first two well pad, you know, the volumes and the decline so that we can make the appropriate decisions around cap – you know, how much capacity we need going forward with the midstream counterparty.
So we’re progressing those discussions. We certainly feel like there’s an opportunity there to, you know, put Gulfport in a great position going forward. Any time you’ve got multiple folks looking for additional gas, but nothing to announce at this point. And certainly factoring that into our development timing. I’ll kick it over to John or Matt to talk about where we go from here.
John Reinhart: Yes, Tim. Again, appreciate the question. You know, I think as the company sits here and looks at our portfolio, we’re very pleased to have a lot of different toggles to push on the liquid side. You know, you’ve got the Utica condensate that we’re focused on this year, you’ve got the SCOOP condensate and NGLs we’re focused on. Now you have the Marcellus. So in addition to some really high-quality dry gas acreage. So in the public deck, too, we – if you look at the returns on all those across, you know, the fairway, they’re within 10% to 15% of each other, depending on the commodity environment. So that’s a really good place to have a lot of high quality acreage that kind of warrants capital. So given that kind of landscape and looking forward, what I would expect is a cadence of about a pad to a pad and a half Marcellus a year – as we develop it.
And then certainly, we’re going to be mindful if commodity prices change and liquids prices kind of outpace gas, and that’ll move the needle. And consequently, if gas takes a run, you might see us lean down a little bit like a 1 pad per year. But having another high-quality liquids-rich play with two-plus years of inventory within the portfolio to toggle activity on, it’s a really good thing. So we’re pretty pleased with where we sit. So that’s kind of the cadence and the pace and that’s how we would look at it, Tim.
Tim Rezvan: Okay. That’s helpful. I appreciate the color. Then as my follow up, you know, when you talk about the activity deferrals you’re doing this year, you know, one on the drilling, one on the completion side, I noticed they’re both in the SCOOP. Is that just coincidental based on your ability to sort of toggle that – the schedule? Or you know, how do we think about, you know, the deferrals there, you know, was that sort of intentional returns base versus the Utica, or again, just coincidental? Thanks.
John Reinhart: Yes, no. I appreciate the question. Actually, it’s really more of a logistical and an economic function. I mean, if you look at it, whenever we looked at capital spend this year and we looked at any kind of DUCs that we planned, that we’re carrying, that’s going to rank up there on something to assess given, you know, the commodity environment that we’re in the first half of the year. So really, the uncompleted lack of production for ’24 on the DUCs really played into the drilling deferment. And quite frankly, just the spot crew and the availability to shift schedules around versus the continuous crude that we have running into Utica, really played into our economic decisions to be able to shift that a month-and-a-half and realize some value there. So it’s really about logistics, and quite frankly, just economics and value uplift.
Tim Rezvan: Okay. Thanks for the comments.
John Reinhart: I appreciate it, Tim. Thanks.
Operator: [Operator Instructions] The next question is from the line of Jacob Roberts with Tudor, Pickering, Holt. Please proceed with your questions.
Jacob Roberts: Morning.
Michael Hodges: Morning.
John Reinhart: Morning, Jacob.
Jacob Roberts: Circling back to the Marcellus, and you know, we understand it’s early days and you had mentioned some learnings from offset operators. We were wondering if there is any need or desire to organically delineate the asset, and if so, any potential upside you see to that location count?
John Reinhart: Yes. No, I appreciate the question. I think part of our initial, you know, you can call it somewhat of a delineation is when we drilled this first 2 Well Hendershot pad, we drilled to the northwest and then to the southeast. And I wouldn’t qualify it as a delineation for is it going to be economic or how prolific is it for us? We knew just right across the river there were really good Marcellus wells. The development was there. We’re really proximate to our locations in our acreage footprint right across the river. So for us, it was more about identifying kind of liquids yields, NGL yields, what’s condensate look like, and all of that information is really there to help us kind of start looking at the midstream solutions and looking at the productivity.
