So the quickest wins are going to be on just pricing, pricing on things like sand, fuel, frac, wireline, et cetera, are wins that we were able to get kind of the day after we closed. Probably followed up by that, it will be rigs. I think we’ll be able to go get efficiencies either by swapping out rigs or kind of applying best practices to grow faster or — moves, et cetera, with kind of the economies of scale of the business. And then kind of I think what will bring up the rear will be the LOE changes. A lot of those are kind of water disposal, contractual-based type deals or things that take a little more time. But we’re one week in today, and I think we are feeling as confident as ever to be able to go get this.
Neal Dingmann: Yes, certainly a lot of upside. And then, James, maybe my second one for you just on shareholder return. Just wondering, do you believe the current — your current 50% free cash flow payout will remain optimal going forward as you all get larger, as production increases as that even goes down further? Or is there any reason you’d see to maybe step that up in that case or potentially even lowered if you want to decide to boost production?
James Walter: I think we really like our framework. I think what we came out with 1.5 years ago or so was really the right balance, and we’re trying to strike the right balance of making sure we maintain operational and strategic flexibility to take advantage of the opportunities that we see in whatever environment we’re in, but while also returning capital to the shareholders in a way that’s really meaningful and substantial. So I think we nailed it with the plan, and we have no plans to change it.
Neal Dingmann: Yes, I think it’s very steady. It makes a lot of sense for you all.
Operator: Your next question comes from Scott Hanold from RBC Capital Markets.
Scott Hanold: You obviously all identified some opportunities to — for the synergies, especially on the operating cost side. And I know you’ve only had Earthstone for about a week, but like big picture, how quickly do you think you can get the Earthstone operations up to speed to your standards? And especially on the OpEx side, which has been certainly in the area that’s run high for Earthstone?
Will Hickey: Yes. I kind of break into three parts. I think kind of if you think about just overall synergies from a cost perspective, there’s some just kind of economies of scale pricing corrections that we are already getting that are showing up kind of day 1. Just we’re running two to three frac fleets from the same company, and there’s some benefits from doing that, that we’ll get immediately. I think the rest of kind of the efficiencies on the D&C side probably come next. If you think about in the last merger we did with Colgate and CDEV, we were able to drop kind of down to rigs call it, six to nine months post close. And here we are a year post closing kind of better efficiencies than either company had on a stand-alone basis.
So I think kind of, call it, plus or minus six to nine months on the kind of D&C side. And then the LOE will be the slowest. I think that, that will take time just because a lot of that is contractual and things that we’ll have to go work through on combining contracts and renegotiating things like that. But if you think about it, we lined out that we could achieve this $175 million run rate by the end of the year next year. And I think we are — from everything we’ve seen, very confident that we will both be able to get that, likely get more than that and maybe even be able to get it quicker. So — but that’s kind of how they would line out over time.
Scott Hanold: Yes. And so on the operating cost side, just to clarify, you see more of that is contractual versus operational like you don’t need to go out in the field and change plumbing and everything else on those wells that you’re inheriting?
Will Hickey: No, absolutely. There’s a lot of that as well. I just think of it as — if I think about the big needle movers being kind of artificial lift optimization failure rate, which is what you just described, that’s in the field best practices. That will be stuff that we’ll do kind of — we’re starting to work through in real time today. But the other big piece is water disposal and water disposal is going to be more of a little longer lead time, finding the optimal SWD disposal or recycling process and kind of working through some small contracts along the way. So a little bit of both, I guess, to be the short answer.
Scott Hanold: Okay. And just a follow-up. I know, obviously, we’ll get the better 2024 outlook as we get into early next year, and I appreciate the need. It’s a very dynamic market. But like — when you think about whether you look at a 0% or 10% kind of growth rate range, can you talk about the factors? Like is it — some of it is a fundamental macro? Or is it price? And how do you think about hedging as you kind of think about that? Like if, for example, if you were able to hedge a high enough price, would you say go to the higher end of growth regardless of what the macro looks like. So any kind of color on how you think about that strategy?
