Keith Stanley: Follow-up on the — sorry, again, on the frac spread. I just want to make sure I understand this right. So the 60% is hedged above $0.60 a gallon, can you say directionally, I think 2023 was a little higher than that when you did your plan? Just trying to think directionally where that sits on the $0.60.
Willie Chiang: Yes, Keith, this is Willie again. For 2023, we were very well hedged. We actually put these hedges on proactively in late 2022. So if you think about the weighted average value of that hedge is a little bit over $0.70. So if you compare it to what we actually hedged in 2023, it’s circa dime lower than that. If you think about the impact of that, that’s roughly plus or minus $70 million. And as Al pointed out, we also have a turnaround — we had a turnaround this year that next year that we won’t be having. So that may give a little better indication of where the NGL business is.
Keith Stanley: That’s very helpful. The second one I know the company has talked about the preferreds not being a near-term priority. Just curious with the official leverage target now at 3.25% to three quarters? Under certain circumstances, would you consider going above the leverage target in order to repurchase the preferreds? Or if you were to take out the preferred at some point down the road, would you need to still stay within that new leverage band?
Al Swanson: This is Al. There’s been no change in our thinking around the preferreds. Debt markets are fairly high, like an issue in a new 10-year would be 6.5%, 6.75%. It’s a long way of saying that the rates on the preferreds are still fairly attractive in a easier to our weighted average cost of capital. Our intent would not be to meaningfully increase leverage to take those preferreds out. So it’s hard to say hypothetically what you might do a few years down the road. But we won’t sacrifice our financial flexibility to reduce them again because they’re not that high relative to our cost of capital. We think our weighted average cost of capital today is in the 11% to 12% range. And the preferred on the same weighting are 200-plus basis points less. So again but there will be 1 day where maybe we will be able to take them out but we don’t want to sacrifice financial flexibility.
Operator: One moment for our next question. Our next question comes from the line of Neel Mitra with Bank of America.
Neel Mitra: I wanted to touch on the Permian long-haul volumes. It seems like they fell a little bit more disproportionately relative to gathering and intrabasin in the quarter versus the second quarter? And also, how did basin perform just given the low Cushing inventories this quarter?
Jeremy Goebel: It’s Jeremy Goebel. What I would say is on the long-haul volumes. That was just some market dynamics in Corpus. It was cheaper for the shippers to buy at Corpus than it was to ship the barrel from Midland so it was just an election by some of the shippers on the pipeline but it’s transitory. The pipeline is going into the fourth quarter in line with where they’ve historically been and demand is robust longer term for the shipments. Basin is a similar story, there was — as the inventories come down, there was less need for movements in that direction. But directionally, as those inventories go down, there’s more bolt-on basin.
Neel Mitra: Got it. Perfect. And then if I could ask generally your — what you’re seeing in the basin on growth dynamics. I know most of the gas processors had flat volumes from May through August, just like yourselves. But can you touch upon which regions got affected the most? Was it the New Mexico Delaware that was impacted the most versus the other basins? And then also what you’re seeing from the producers during the heat that would have impacted their side versus the infrastructure side, understanding that you guys are up and running again in October with strong volumes.
Jeremy Goebel: Thanks, Neel. It was that Stateline area north into New Mexico. I think the other dynamic there was the — some of the issues around flaring and stopping of flaring. So it all hit at once and it was within a 3-month period but the big surgeon volume is coming from those same regions and part of the Northern Midland Basin. So I’d say it’s recovering and then some and we see that momentum carrying based on the connections we have made in November and we’ll make this month and next month into next year that momentum should continue.
Neel Mitra: And Jeremy, I don’t know if I got a response on basin, how that was running during the quarter, if you don’t mind commenting on that.
Jeremy Goebel: Sure. It was in line with expectations and as inventory strain, we would expect the volumes to increase.
Operator: One moment for our next question. Our next question comes from the line of Doug Irwin with Citi.
Unidentified Analyst: Just a couple of follow-ups on guidance. So maybe I’ll ask both at once. First, I’m just wondering if you could kind of help bridge the facts that the EBITDA guidance moved higher but then we saw cash from operations and free cash flow move a bit lower, I’m sure the acquisitions have an impact on that. Are there any other sort of moving pieces you can point to there? And then again, kind of on the implied 4Q guidance, the midpoint implies a step down versus this quarter. Just wondering if you can kind of help reconcile that step down versus some of the tailwinds in the year-end light these acquisitions and probably Permian growth rebounding a bit.
Al Swanson: This is Al. I’ll take a shot at the first one. Yes, between the free cash flow and the cash from operations, effectively, the acquisitions reduced cash flow from the free cash flow number by roughly the $135 million that we described. The other 2, higher EBITDA has been in our forecast is offset by higher taxes as well as our assumed working capital and merchant needs. Again which is all kind of timing related. Those were really the 3 things I would point to. As to kind of guidance — third quarter to fourth quarter, Again, we feel like the midpoint of our range, we do see quarterly flux between them. It would probably be better to take offline with the IR team kind of any more micro detailing type of discussion.
Unidentified Analyst: Okay. Understood. Appreciate it.
Operator: Thank you. One moment for our next question, please. Question comes from the line of Jeremy June with JPMorgan Securities.
