Guy Oliphint: Yes. Just on commodity mix, generally, oil is really just strong well productivity, gas and NGL trends are really just a combination of oil cut in the areas where we’re drilling. Specifically on NGLs, it’s kind of the content of the gas, we’re popping wells and the associated midstream contracts with a little bit of midstream constraints. I don’t — I think you’ll see some fluctuation there, but not kind of a persistent trend off of one quarter.
Operator: Your next question comes from Oliver Huang from TPH.
Oliver Huang: Congrats on a solid quarter. Just wanted to start out on the ops front with respect to the efficiencies that you all kind of gained over the quarter. What’s the confidence level in being able to keep that Q3 run rate going over the course of an entire year and as we kind of think about how much activity a base program of 11 rigs could get done. And also, is there any sort of inclination to do something similar like you all did with the Colgate deal in terms of just dropping a rig once efficiencies are achieved or would the thought process be to just kind of take advantage of those efficiencies to drive a little bit more pro forma growth? And I guess that kind of dovetails into — just kind of — just being tight lipped on the 2024 outlook at this point in time.
Will Hickey: Yes. I mean, I guess I’ll give you some color around it. These efficiencies, a lot of them are just like small things. We’re just continuing to get buy-in from the field, driving down flat time on both the drilling side and downtime on the frac side. So I think they’re going to be pretty sticky. Q3 was a quarter where everything went right. So can we maintain that exact same run rate for a whole year that may be a little bit ambitious, but at the same time, I think we’ll continue to find small things to improve upon. So I do think that the go-forward efficiencies will look more like Q3 than they did any of the previous quarters. And kind of what does that mean for next year? Look, I think the way that we run our budget and think about it, is we’re going to solve for what’s the right amount of capital to spend and kind of that will be dictated by how James laid out.
What is the ultimate kind of return on that capital, kind of how efficient is that widget in the calendar year in which we’re doing it. And then we’ll leverage these efficiencies to rightsize the amount of equipment to hit that capital budget. So the answer is everything is on the table. We may run less equipment and drill more wells because we’re being more efficient. We may run the same amount of equipment and drill even more wells because we’re trying to spend more capital because of the return on the capital, et cetera. So you can feel rest assured that we’re going to keep these efficiencies and use the equipment that’s generating these efficiencies, but kind of how we use it and how much of it we use is still kind of things we’re working through in real time.
Oliver Huang: Okay. That’s helpful color. And just one more kind of thinking about Q4, given the year-to-date outperformance on efficiencies. Are there any concerns with respect to budget exhaustion that might drive a loss of efficiency with having to pull back a rig or crew? And could you also remind us how many crews you’re running on a pro forma basis when including Earthstone and if there are any plans to pick back up a spot or full-time crew for next year?
Will Hickey: Yes. We’re not going to do anything that doesn’t make sense operationally. We’re not going to do — we’re not going to drop a very efficient rig or anything like that to kind of stay within quarter-to-quarter budget constraints. We do have the benefit that we were always planning on. We ran three frac fleets on PR standalone for the majority of Q3 and we are planning on dropping to two in Q4. Given the efficiency we saw on the frac side, we dropped down to two fleets a little bit earlier than expected in Q4. So I think this is going to be one of these where we didn’t — we were able to kind of do both. We’re going to kind of have a drop in CapEx in Q4 that kind of keeps us in line with where consensus and kind of expectations were for full year CapEx on PR standalone, while also keeping all of our rigs and our two dedicated frac fleets that we’re able to achieve the efficiencies you saw.
So hopefully that answers your question, but we’re going to — we’re not going to drop rigs or frac fleets that have seen these crazy levels of efficiencies kind of based on quarter-to-quarter budget.
Operator: Your next question comes from Paul Diamond from Citi. Paul Diamond from Citi your line is now open.
Hays Mabry: Paul, I think you’re on mute, if you’re there.
Operator: Your next question comes from Leo Mariani from ROTH MKM.
Leo Mariani: I was hoping you could maybe just discuss the M&A landscape a bit. Obviously, you guys have been pretty acquisitive throughout your history, going back to Colgate and now in PR. So how do you kind of see things out there now? Or there are deals available? What’s your appetite? How would you kind of characterize some of these deals out there? Just any color would be great.
Will Hickey: Yes. And I said it earlier, but I think worth emphasizing again, I’d say our very first priority and focus right now is on integration and execution, that comes first always. But I’d say, yes, you’re right. We’ve been constantly in the market and understanding it. And I’d say it’s changed quite a bit over the past nine months. I’d say we saw a very long backlog of kind of large-scale private deals come to market the first nine months or so of the year. I do think that backlog is largely exhausted and slowing. I’d say for us, we looked at all those deals, I’d say we’re focused on doing transactions that enhance the quality of our business and our inventory base, and that’s a really high bar today and didn’t find anything outside of the Earthstone acquisition that fit that bar of scale.
