Davis Ravnaas: Yeah, excellent. And not to kind of repeat a little bit of what I said earlier. I think on balance, what we’re hearing from operators is that they want to maintain production volumes, at least on the oil side in the Permian specifically. I think on the natural gas side, we’re seeing a little bit of a mixed bag. Some operators when we all see the headlines in the last couple of days about some operators cutting CapEx, cutting production guidance, which we think makes incredibly good sense in this natural gas price environment. But we may see a little bit of a less production growth or less of an ability to replace production on the maintenance front on the natural gas side. But again, I feel very confident about the oil-weighted asset base roughly, let’s say, just over 50% of our rigs running right now in our acreage are in the Permian.
And then we’re pretty well diversified after that with 17% in the Mid-Con, 13% in the Haynesville, 8% of the Eagle Ford, obviously, oil weighted, 6% of the Williston oil weighted and so on and so forth. So I think what you’ll see is that operators overall are going to — what we’re hearing is that they’re going to maintain production volumes, maybe slight amounts of growth just depending on what’s going on with their drilling programs. But I think that because we’ve happened to have acquired large assets in the last two years with a disproportionate number of DUCs relative to that maintenance production level, we would expect that our portfolio will look quite good on a relative basis to perhaps lower 48 growth overall. And again, we can’t guarantee that, but we feel we feel very confident about near-term development on our asset and the ability to replace decline production barrels.
Neal Dingmann : Very love to hear that activity. Thank you all.
Davis Ravnaas: Thank you.
Operator: Our next question comes from Paul Diamond with Citi. Please proceed with your question.
Paul Diamond : Thanks. Good morning, all. Thanks for taking my call.
Davis Ravnaas: Good morning.
Paul Diamond : Good morning. I just want to touch quickly on the kind of the opportunities that you guys are seeing for further growth. Is there — as the market sits right now, kind of an ideal scale of the deals you’re looking at? Are those — do those family offices need to get to a certain kind of level before it makes sense for you guys to really talk to? Or is it more just kind of like maintaining that conversation and seeing where things go in the future?
Davis Ravnaas: Yeah. Great question. I haven’t gotten that question addressed in that specific way. I wouldn’t say it’s necessarily the scale of the portfolio size that’s the most important characteristic of making — making assets appealing to ourselves and other larger institutional buyers. I’d say it’s more a sign of waiting until the assets are at a balance of cash flow accretion today, right? We’re not going to buy something for 10 times cash flow that’s immediately dilutive to our cash flow per unit. But then there has to be enough upside on the asset to where it’s not just a declining one. And the reason for that is that obviously, it could be cash flow accretive today, if you buy something at three times cash flow and then obviously dilutive in a year as the asset runs out without the ability to replace the inventory.
So when we continue to focus folks on that are out there working hard every day, putting together mineral portfolios, is try to think about the exit as you’re putting the assets together, try to think about putting that right balance together of cash flow and drilling inventory, so that somebody like us can pay the price that they need to justify the returns that they want. And we believe in win-win outcomes. We want the folks that we buy deals from them to make money. And they want us to make money. And that’s — and the reason we say that is because a lot of what we do is buy from repeat sellers and have a report with them or they know that we’re going to do what we say we’re going to do. And — we know that the quality of title and asset that they’re delivering to us is going to be solid because we’ve gone through the diligence process with them before.
So size is relevant. I wouldn’t say it’s as relevant as what I was just alluding to. But on the size aspect, it’s been really tough to find deals that make sense for us, candidly, just from a pricing perspective under $25 million or $50 million. It just seems like that size range, anything under that just attracts an incredible amount of attention from buyers and we’ve just been priced out of those deals. And I think you’ll see that not just for ourselves but also some of the other public companies, where we’re just a little bit surprised that it looks like some people are just trying to put money to work. And if the expectation is that they can outbid us today for a $25 million asset and maybe put together four of them and then try to bring that to us is a $100 million deal, that’s not going to make a mathematical sense to us.
