So it’s something that we’re proud of, we’re focused on, I think probably a little underappreciated by the market and, but it’s really ultimately comes down to helping us earn better returns on every dollar that we spend.
Operator: [Operator Instructions] We go next now to Geoff Jay at Daniel Energy Partners.
Geoff Jay : I was just looking for you referenced your power infrastructure build outs would kind of love to hear what’s happening there, what the scale of that is, how big that’s going to be for you guys. It’s obviously kind of a pressing issue these days.
James Walter : Yes, look, line power in in the kind of entire Permian’s tough in Texas it’s tough and in New Mexico’s tough. So, we’re trying our best to stay in front of it. I’d say kind of as you think about our power needs, if we can be on line power, that’s obviously preference. And after that, if we can kind of leverage natural gas power generators is probably the second-best answer. And that’s kind of what you’ll see for the majority of our New Mexico infrastructure. But it’s a priority for us. I’d say, we are actively looking at ways to improve that position collaborating with others to look at building incremental substations and really anything we can do. But it doesn’t come quick and I think it’ll be a challenge for the industry for the next few years. I don’t think it means we won’t be able to produce our wells. It’s just a little bit less efficient to be on natural gas power generators than it would be to be all online power.
Operator: We’ll go next now to Paul Diamond with Citi.
Paul Diamond : Just a quick one, talking about the kind of acquisition pipeline as you’re seeing looking forward to kind of what’s next. Are you seeing any kind of movement on the bid asks, based on scale, location, or is it all pretty much pretty cohesive and correlated?
James Walter : Look, I mean I think our pipeline on the A&D side feels really good. I think there’s a lot of — there tend to be lots of opportunities in the Delaware and I think our position as a kind of preferential party for a lot of sellers and a low cost operate in the basin position as well as assets come for sale, kind of both marketed deals which we participated in successfully, but also, I think just importantly kind of off market assets, which has been a large chunk of our acquisition program historically. But it feels good. I don’t think, there’s probably not the size of deals that you saw hitting the market in ‘22 and ‘23 in the Delaware, which I think we largely stayed on the sidelines from. But I think we’re seeing a lot of stuff that fits kind of the grassroots side is maintaining lot momentum and we’re still seeing lots of bolt-ons probably coming down the pipe this year where we wind up acquiring all of them definitely not, but are there some that could fit?
I’d like to think so, but we’re really picky and we want to buy assets, like I said, that make our business better and that earn a high rate of return and drive value for shareholders. If we can continue to do that, that’s great, but we’ve said it before, we don’t need to do anything. We think we’ve got an incredible inventory base and incredible standalone business. If we can find those opportunities, we’ll be excited to pursue them, but certainly don’t feel any pressure to do so.
Paul Diamond : And just a quick follow-up, so thus far, you guys have been pretty balanced with your shareholder return framework. Is there anything you guys are seeing in the markets that would kind of tip that scale one way or the other?
William Hickey : No, we’re going to kind of naturally bias towards the dividend. I think that the variable dividends are our base case and we’ll be opportunistic on potentially increasing share buybacks at some point in the future if kind of dislocations and large opportunities exist. But no, I’d say really steady as she goes on the capital return strategy. Do think it’s worth mentioning? We did show a 20% increase in our base dividend this year, which should hit for the quarterly dividend payment upcoming and a nice increase in our variable cash dividend as well. It feels like that’s working really well and we’re excited about it.
Operator: We’ll go next now to Kevin MacCurdy at Pickering Energy Partners.
Kevin MacCurdy : To follow-up on an earlier question about M&A, your last couple of deals have been concentrated in the Northern Delaware. Just kind of a general question on how you are viewing opportunities in the southern Delaware versus the northern Delaware. Are there, as many opportunities out there and how do you kind of compare the two of them?
William Hickey : I think that’s a great question. I think looking back historically, the kind of first consolidation wave in the Delaware was Texas focused. If you think like 2017, 2018, 2019 a lot of Texas businesses and that’s where the Delaware got started at least activity was faster to begin. So I think you’ve seen a natural consolidation wave in the Delaware as of late. I think for us specifically we got a great Texas position today with some really high return to go forward drilling to do. If we could find opportunities in Texas that compete for capital, like what we’ve seen in New Mexico, we’d be really excited about it. I think those opportunities do still exist. I just think kind of the majority of assets that we’ve seen that fit what we’re trying to do from a making the business better standpoint have been in New Mexico the last couple of years. But I think that could change and we’d be really excited if we could find similar opportunities on the Texas side.
Kevin MacCurdy : And changing gears a little bit, you mentioned an additional 3,500 barrels a day equivalent and an additional $50 million of capital once you close the bolt on acquisitions later this quarter. Just to clarify, is the 350, or — sorry, the 3,500 barrels a day flowing, is that flowing production now? And if so, what will be the production impact of the additional $50 million capital spent?
William Hickey : That production is online now. The majority of that’s from an acquisition we haven’t closed and don’t close to the end of this quarter. It’s kind of online now, but it’s not ours, if you will. And then $50 million is CapEx that we’re going to spend in the back half of this year. That awesome, awesome high return inventory. Really excited to get our hands on. Again, we don’t own it today so we can’t get –again. All the production you’d see from that’s going to show up next year, but really strong returns and something we’re excited to get after as soon as we can get our hands on the asset.
