Trafford Lamar: Perfect. Thanks guys.
Davis Ravnaas: Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Tim Rezvan with KeyBanc Capital Markets. Please proceed with your question.
Tim Rezvan: Yes. Good morning, everybody. And congratulations on the Texas Rangers last night.
Davis Ravnaas: Yes, thanks.
Bob Ravnaas: That was a great game.
Tim Rezvan: Good series. Derrick actually took both my questions, so I was hoping to push a little more, because I think they’re important topics. On the M&A market, you’ve seen some pretty attractive debt financing set up by peers of yours. And I’d imagine that sellers noticed that as well. So we saw – it looks like a logjam broke on M&A this year and now that there’s more financing available maybe than people thought in the year – at the start of the year. I’m just trying to understand sort of what’s the latest kind of – how do you think about kind of the near-term outlook overall for the sector?
Davis Ravnaas: Man, it’s a really great question. That’s one of the most fun things about our business is looking at the M&A environment, and it’s been really fun to watch and evolve since we started doing this well, 25 years ago, but in the public context and gearing up for public the last 10 years, we continue to be surprised by just the sheer volume of private sellers that are out there. There are groups out there that have $100 million packages that we just get introduced to on a weekly, if not monthly basis, they didn’t know previously. I mean there’s just an incredible consolidation effort going out there – going on out there, and it’s really just a reflection of just how big the industry is. We’re going to see that over $0.5 trillion in size, and it’s just massively fragmented.
So, we expect that trend. If you look historically, and if we had like a bar chart of it, it just continues to always go up. And frankly, it always surprises us. We always end up being a little bit conservative on how much M&A volume there is out there. Our view, so I would say that we continue to expect robust M&A activity. Our view is always to be just highly selective in what we buy. We try to sit around and look at the landscape and say, what’s the best possible asset out there that we can get at a price that maximizes returns to our shareholders. And we try to focus in on those opportunities, and there’s not a lot of them every year, if you run up the Rangers, we’re just waiting for the right pitch and we want to swing at the right opportunity.
So I agree with you on the debt financing angle. I don’t think that – you’re looking at an environment, where there’s a very small number of public buyers and there are hundreds, if not thousands of private buyers. And so, I think that sets up a very favorable dynamic for us as a buyer, as a public buyer. I think that in cases, the private folks have gotten a little bit disappointed by the ability to pay of the public. And I think you’ve kind of forgotten in some cases that the public valuations, where we trade should trickle down to what the private valuations are. And so for us, I think – and you’ve seen this consistently, there is a strange dynamic going on. We’re seeing some private folks raise money and outbid public competitors, and that’s just kind of the opposite of what you would expect.
So maybe at some point, that changes, but focusing on some of these larger packages where there is a limited exit opportunity seems, to be working for ourselves and our peers, not just us, it seems to working for everybody. So, I think we’ll just continue to do more of the same in this environment. Bob or Matt, anything you guys want to add?
Bob Ravnaas: No, that’s a great answer.
Tim Rezvan: Okay. That’s great. I appreciate that context. And then back to the sort of the maintenance activity levels. I think 5.4 net DUCs, 3.9 net permitted locations. You have now a much bigger exposure to sort of the Mid-Con. I’m just curious kind of any insight on visibility on converting those permits to PDPs. And you mentioned strong execution in the third quarter. Just how that’s been trending? And how you think about that now that you have a lot more exposure to the Mid-Con than you had earlier in the year?
