Paul Cheng: I have to apologize is that I joined late, so if my question has already been addressed, please let me know, I will look at the transcript. We — just curious that some of your competitors is talking about the refrac and redevelopment opportunity in Eagle Ford. Have you guys do more detail and notes on that. I assume that currently, your inventory backlog that you mentioned, say, 10 to 12 years, that’s not including that — So if we’re including those that — how big is that opportunity for you? And what kind of oil and gas price you need in order for those that to be economic? That’s the first question.
Lee Tillman: Yes. Paul, let me take a first pass of this and then I’ll maybe let Mike sum some details. First of all, in terms of inventory, we do not put refracs into our inventory. So when we talk about inventory life, these are primary development opportunities, new drill wells, if you will. We’ve had a lot of experience in the Eagle Ford with refrac and the best and redevelopment. It continues to be an area that we pursue. But again, because we have so many primary recovery opportunities there. We usually do them when there’s synergy with nearby new development, but maybe I’ll let Mike just throw in is as well.
Michael Henderson: Yes, Paul. No, you hit the nail in the head there. I mean, our approach with refracs is as we’re pulling together a fun development, we’re looking at our primary infill — we’ll have a look at the section, and we’ll determine that the team is determined then, is there a potential refrac candidate or refrac candidates in the section. And quite frankly, those opportunities have to compete for capital on a heads-up basis with all of the other opportunities. So rest assured, we’re doing refracs. They are profitable and they are competing with infill opportunities. I mean to give you a kind of idea for the scale in any given year, I think we’re probably doing less. We’re probably in the 10 to 15 new fracs this year, and that’s kind of how we think about it.
It’s not a targeted program what we will call and do a bunch of refracs exactly to Lee’s point, I think we’ve got enough primary and sole opportunities that we just don’t to do that. I think probably answered most of your questions there. The pricing, they’ve got to compete on a heads-up basis the other capital that we’re deploying.
Lee Tillman: Yes. The other maybe item I would point out, Paul, as well as maybe just reflecting back on the Ensign conversation that we were having — in that acquisition, we placed no value on our refrac and redevelopment activities. We based the value really on PDP and the full route 600-plus new primary recovery kind of opportunity that existed there. So as you recall from the acquisition, there were 700 existing wells, many of which — most of which were completed back in time, right? And so you’ve got a lot of early generation completion technology out there. We haven’t had a chance yet to quantify that because the primary opportunities within sign are so attractive. They’re a little bit further down a priority list, but we absolutely expect in the balance of time to continue not only in the legacy area of the herd, but also in the inside area of Eagle Ford.
So look at refrac and redevelopment opportunities going forward. But again, it’s just a question of prioritizing them within the capital allocation.
Paul Cheng: The second question is I want to go back into the EG commercial renegotiation on the post 2023, is it necessary for you that you have 100% of the volume under long-term contract or from a portfolio management standpoint, better off for you to reserve a fairly sizable amount on the spot market so that you can take the opportunity of the trading and maybe other tranche opportunities. And also that I know you already have a large exposure starting next year on the international gas market, but does it make sense for you to further diversify your maybe that when we argue that is financial engineering on your U.S. natural gas exposure to also linked to the international market by signing some supply agreement that with the U.S. Gulf to LNG operator, I know some of your peers have done?
Patrick Wagner: Paul, this is Pat. I’ll take that. Maybe I’ll start with your second question first on U.S. gas linkage to LNG. I mean we’re always exploring ways to maximize our realizations, but we are heavily exposed in EG to the LNG market. So there’s nothing in the U.S. You have to have a significant amount of gas volume to do that in the U.S. just happen focused on that and don’t see us doing that in the near future. In terms of EG, we will commit to a certain level of volumes through a long-term contract. We will have some terms in there that I want to get into too much detail that we’ll have how we handle extra volumes, but I expect that we will have capacity above that sell into the spot market. as progressed. That’s — a lot of those details are still to come, and it depends on the specific negotiations with the buyers coming.
Paul Cheng: Pat, can I just want to clarify that from a company intention, what will be the ideal mix for the EG contract, do you have a number you might say 70% lock-in on contract and 30% spot or something bigger, something smaller? Any number that you can share?
Patrick Wagner: No, I don’t have any specifics to share with you. But I would think the bulk of the contract will be fixed.
Operator: Seeing that there are no further questions at this time. I would like to turn the call back over to Lee Tillman for closing remarks.
Lee Tillman: Thank you for your interest in Marathon Oil, and I’d like to close by again thanking all our dedicated employees and contractors for their commitment safely and responsibly deliver the energy the world needs now more than ever. Do not be proud of what they achieve each and every day. Thank you, and that concludes our call.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
