Vicki Hollub: Well, certainly, I would say that we are not including the capital for the DAC as a part of our breakeven or sustaining capital. If we were in a scenario where we were down in a $40 environment, unless we had significant capital inflow from somewhere else, we would significantly cut back our development on the DACs unless that development was supported by others. So I would say that when you think about the breakeven for us and I kind of wish we had never brought that term up because it’s so misleading to people. We — I would say the difference in where we are today, where maybe we’ve been in prior times is that we keep a model of what it’s going to take to support our dividend at various oil price levels. And what we’ve said is still true that we want to ensure that we’re close to a $40 breakeven or less so that if we’re in that environment that we can still sustain the dividend.
I never want to go through a scenario where we would have to cut it again. But what that breakeven really is, what would the price and the world look like at $40. So you can’t take our numbers right now and back into what it would be and expect it to be $40. We’ve obviously elevated our capital investment higher than than what it would be, what the calculation would show the breakeven is today. So breakeven for us means that if you’re in a $40 environment, then the supply chain, the services and materials, all of those things would be adjusted to that kind of environment to that cost. And in that environment, our cost would then be less than it is today on OpEx and even labor cost, services materials — So in that environment, we look at what would it take to ensure that we could sustain our dividend growth.
And that’s how we would calculate that. So — and that — and sustaining capital is different. As I explained earlier, sustaining capital is where you have every asset, the investment level at the point where you’re generating the best returns that you can generate from the infrastructure and facilities that you have and the resources that you have. So with what we’re doing today, as we continue to reduce our cost structure as we continue to lower our interest from our debt reduction, and we’ve as we will buy back some of the preferred, we’ll lower that cost as well. We use those two measures as the primary way we can calculate how much we can grow our dividend. So as we’re continuing to reduce interest as we’re continuing to reduce the preferred dividend, that will be the capacity available for the growth of the dividend.
And to further get it to increase it on a per share basis, our share repurchase program is intended to help with that as well. So it’s an absolute number cap that we have as well as a share repurchase program that allows that dividend per share to continue to increase over time.
Operator: And our next question today comes from Paul Cheng with Scotiabank.
Paul Cheng : Two questions, please. If — I have to apologize. I want to go back into the inventory. That number, how that will change for those that less than $50 WTI and we changed the Henry Hub gas by to 2 50 and the internal way of return to, say, 15%, 20% and also for the cost, I mean how that is going to get changed? That’s the first question. And the second question that I think a lot of your peers that — or at least some of them have signed the LNG supply agreement and one of your largest peer actually make investment — equity investment in the LNG plan. Want to see if Oxy think that, that will be a suitable investment for you? And what is the game plan there?
