Tim Rezvan: OK, I appreciate the comments. Thank you.
Operator: Thank you. Our next question comes from Doug Leggett with Bank of America. Please proceed.
Douglas Leggett: Good morning, guys. First of all, I think we’ve got to acknowledge the step change that you promised the market on efficiency is obviously showing up, compared to Legacy Gulfport. I’m curious, whoever wants to take this, how much further do you think you have to go and where do you think you are? And, in terms of that trajectory of you’re down 35% on both basins at this point, what’s the aspirational target?
John Reinhart: Well, I think as we look at the efficiency gains, we’re very pleased at the progress to your point here today and appreciate the comment. as the team starts to mature and gel, this team’s been together probably, nine months, probably seven months in the field. I would probably say we’re, 40% to 50% into the efficiency kind of cycles as we see opportunities to further improve. There’s certainly some more wood to chop here as we move forward. You know, service costs, addressing service costs, renegotiating contracts, farther kind of eliminating dead time in between cycles and just overall kind of shrinking that cycle time, that spud that turned to sales time. So, again, appreciate your comments and the acknowledgement on the improvements.
But there’s certainly some more opportunities that we feel like, especially looking down in the scoop as we’ve started, as we’re looking forward to actually developing that asset this year. We’re very happy about taking the learnings that we’ve learned from the Utica and applying those to the scoop to make what is already an attractive asset and very good returns a lot better. So, more to come on that this year as we start development in the scoop.
Douglas Leggett: As you can imagine, there’s an agenda behind my question, and it’s basically your definition of maintenance capital, the 435 to 455. So, what I’m really trying to get a handle on is if you deliver, if you’re only halfway through what you think your efficiency gains could be, what does that imply then for the level of capital necessary to meet your program? Presumably, ’24.
John Reinhart: You know, it’s a great question. What I would say is we’re pleased with the results here today. We certainly see there’s some more improvements as we look forward into ’24 and beyond. right now we’re in the middle of finalizing some contract negotiations with regards to service price. So, as far as us coming out with what that will look like next year, that will have to wait till February when we roll out the ’24 plan. But to your point, we feel very comfortable that the capital efficiencies that were gained this year will be carried into next year with further improvement.
Douglas Leggett: Fellas, if you don’t mind, can I squeeze in a third one? It’s a very quick one. You made the comment about your cumulative free cash flow. you could retire your market capitalization. But obviously, that’s a big statement. How realistic, how aggressive do you really think you’re going to be given your hedge position in ’24 in particular as it relates to buybacks and return of capital? I’ll leave it there. Thanks.
Michael Hodges: Yeah. Hey, Doug, this is Michael. I’ll take a shot at that one. Appreciate the question. I think 2024, again, a little early on any guidance. But as we sit here today, a similar strategy likely for the Company is what we employed in 2023. So, we go through a very rigorous process with our board of directors and evaluate all the potential uses of our free cash flow, whether that be additional acreage opportunities, whether it be share repurchases, opportunities on the balance sheet side to improve there. And I think, as we sit here today, our shares we feel are undervalued and we feel like that’s an extremely attractive use of free cash flow. So, I would expect that 2024 is very similar to 2023 from that strategy perspective.
And, if we can capture opportunities like the discretionary acreage acquisitions we did this year, that’s also very interesting and attractive to us. But to the extent that those are not available, I think our shares become one of our most exciting opportunities to return value. So, I think long story short, likely very similar to where we sit today.
