And that’s something, of course, we’ve been exploring to get market access to better price environments for the Montney. We’re set up to access all ex AECO environments for the next three years. And then, we’ve got a deep transportation portfolio that persists even out past that ‘25 time line that lets us stay outside of the AECO environment. And of course, we’re exploring the potential for LNG exposure down the road.
Operator: The next question comes from Greg Pardy from RBC Capital Markets.
Greg Pardy: Thanks for the rundown. I was going to ask about LNG, but I think that sits where it does. With all of the calls the last couple of years, the Uinta has sort of gone from testing with potential now. I’m trying to get a better sense as to how you’d frame the size of that asset. And do you — and I think it competes already. So, what would be the limiting factors? Or maybe what are the parameters you’re looking at to really grow that business?
Brendan McCracken: Yes. I appreciate it, Greg. The Uinta really has been unlocked in two ways. One, we unlocked it with a demonstrated cube development. And then, we also unlocked it with market access. So we’ve shifted that basin from being solely only able to access the Salt Lake City refinery market to now we are moving about 40% of our oil production to the Gulf Coast. And so, what that’s done is really enhanced the margin in the play and in particular, enhanced the margin stability in the play. So, it’s taking the volatility out of realized prices there. And so, today, our Uinta basin margin is consistent with our Permian basin margin at the top of the portfolio. So, both the well performance and the market access unlock have been important.
To get to your question around like where are some of the natural limits there, I think we can continue to see Uinta production grow pretty robustly from where it is today for us because we have those market access options. And so, I think we’ll continue to be pretty disciplined on capital allocation there and just continue to step into the play, but we’re excited about the trajectory that it’s on.
Greg Pardy: And then maybe just shifting back to the Anadarko. What caught my ears, I guess, in listening to the commentary was cutting base decline rates in half. I’m just wondering if maybe Greg can touch on that a little bit as well as just where D&C costs are sitting these days versus, say, pre-pandemic.
Brendan McCracken: Yes. Terrific. Over to Greg.
Greg Givens: Yes. Thanks for the question, Greg. And first on the base decline, it’s just a series of just aggressive blocking and tackling by the team. We focused really hard on our artificial lift, installing plungers, keeping wells on line longer, worked on compressor downtime. I worked with the midstream operator there in the area, making sure that we’re able to handle all the gas from the field as we go forward. So just a lot of really consistent blocking and tackling effort. Obviously, as you slow down production, you eliminate — or excuse me, slow down drilling activity, you eliminate OFI as well. So a lot of pieces there, but just really great effort from the team to flatten that base decline. And we feel like they’re not done yet.
So they’re in a really good place. As we think about cost there, that’s a basin that has got great access to services. So, while the rig count is down in the basin, it is very easy to reactivate and get rigs and frac crews back to the basin as we just demonstrated with this frac crew we picked up for a short-term assignment. And so, the cost there will be similar to where we were prior to the pandemic, minus the tubulars. The tubulars are still — while they’re coming down, they’re a little higher than they were pre pandemic. But I think on a cost per foot, it’s going to be in line or below where the Permian is.
Operator: Thank you. The next question comes from Roger Read from Wells Fargo. Please go ahead.
Roger Read: I’d like to follow up a little bit on what the — bringing the wells forward, and I guess just a little bit will tie into the Simulfrac, Trimulfrac kind of changes. But what else that means for you, right? So, you’re bringing wells on quicker, you’re bringing production on a little quicker. You get a little more capital efficient, but you’re also pulling some inventory forward. So, I just want to understand how you think about that within this overall logistics discussion we’ve been having on here about above ground versus below ground, but tying back to the belowground as you accelerate how that looks within the overall inventory picture.
Brendan McCracken: Yes. Roger, I appreciate it. And really, if you wind back to how we wanted to prosecute the business, we wanted to get to a load leveled activity across each of the assets and really create the capital efficiencies that that load leveling can offer. And we want to run the business to maximize free cash flow. And we knew that as inheriting that wells in progress inventory in the Permian that we got from the acquisition, we were going to have to slow down activity and feather that back to the load leveled program that we want to run. And we were able to accomplish that early because of great work by the team on the integration, but also, as you pointed out, just drilling and completing wells faster. And so really, we’re going to sit at that 5-rig level.
We’re already at that level here today, have been for a little while. And so that will — if we continue to drill and complete faster, that will bring more and more wells into each year’s program. But that’s where we get to Scott’s question earlier, which is, hey, do you pocket those capital savings or do you let that increased activity grow production modestly. And that’s really going to — that decision is going to come back to the free cash flow and return optimization that we talked about. So, it’s all very linked, as you’re pointing out. And as far as accelerating the subsurface and consuming more inventory, I think would just refer you back to my comments about why that’s been so important to swim against that industry tide and deepen the inventory and create a trajectory for Ovintiv, where we’ve got a very long-dated premium inventory to work with, and that’s going to generate the durable returns that we think are going to be valuable.
