Dennis Degner: I’ll tackle that from a kind of a various set of angles, but I think what — when you look at where prices are today, I mean, these are still profitable wells. We think we have the flexibility by pushing these turn in lines deeper into the year and there is the potential, they could even go a little bit farther depending upon what signals that we see in the market. We ultimately feel like pushing them to a time that’s more optimized makes a lot of sense for us. And as you heard us touch on in the prepared remarks, this is all coming on the back of not changing our production guide for the year. Pricing will just be one really one component that we’ll look at. I think we’ll want to keep a close eye on when those wells turn in line, what considerations will involve, what kind of decline do we see in U.S. production.
We’re starting to see a dip below 100 Bcf a day now. We find that encouraging. Rig count seems to be stable and down in some basins. What kind of decline rate do we see further materialize in the Haynesville as an example. So I think those are just some of the aspects we’ll keep a close eye on along with we’ll keep a close eye on along with the commissioning for the next two facilities on the LNG side between Golden Pass and Plaquemines, certainly encouraging result or encouraging information of late on the timing for those facilities but all of that will kind of come into play as we think about the timing at which we would bring those wells back into the mix. They’ll be drilled, completed and ready to go. And so our timing to be nimble — our ability to be nimble and timing to turn that production in line should be relatively short and have the ability to put those wells to sales when we see pricing improvement and stable pricing improvement, not just in a spot market type basis.
Bertrand Donnes: And then I think I heard you mentioned some potential cost reductions on the service side. Are you seeing these reductions track more so with lower gas prices? Or is this a function of the activity cuts by the gas group? Or is this maybe a push by a market share grab by some of the service companies? Just anything — any patterns you’re seeing out there?
Dennis Degner: I think you’ve probably heard me touch on this in the past, but service cost adjustments feel a little different today and they have even somewhat through the last 12 months than maybe prior peer cycles of commodity prices up, service cost up, commodity prices down, service cost down. And what I mean by that is you’re seeing let’s just say electric frac fleets at a still a relatively high level of utilizations super spec rigs are the high level of utilization, ARPs we have some of that under contract, so there is optionality that we bake in as a part of that. But ultimately as you would imagine some of that is secured for the year. We do see that there are starting to have — we’re starting to have some conversations around what will end of year activity levels look like, what will service cost then do in response to that.
So we very well like we saw in the last year or two see some relief associated with maybe some consumables and other respective items that start to see some relief, but it’s early. And that’s we would expect if there are some service cost relief type variables that most likely they’ll start to materialize in the back half of the year, as you see programs start to reach their close or you see further activity get shuttered because of let’s just say poor returns for those other high cost basins. So again it’s early, but wherever the service cost equation lands for the industry this year and particularly in Appalachia, we like our opportunity to be on the leading edge of capturing those costs if they further come down.
Operator: Our next question comes from the line of Paul Diamond with Citi.
Paul Diamond : I just want to touch base real quick on, given current market conditions and expectations, how are you thinking about 25% hedging? You have 55% for this year, 25% hedged for next. Is how you’re thinking about where that right level should be or is that more of a function of next six months or so?
Mark Scucchi: I think I’ll start with our philosophical approach and how we think about hedging, particularly where the balance sheet is today within our targeted net debt levels. The basic principle that we use to back calculate and figure out where we’re most comfortable as a starting point is just to cover the fixed costs. While we’re in the commodity business, this is not just a pure simple commodity bet. There are fixed costs built into the business, be it the technical, the people, the safety and so forth to just prudently, safely, efficiently continue to run the company through a cycle. And to do that while preserving the balance sheet and being better able to maintain a steady cadence to use and fully utilize effectively utilize equipment that we’d like to contract for that we know is productive and the most efficient, the safety and the repeatability of that over time, having some stability in your — in its capital spend or other, the ability to weather dips at shoulder season or a surprise poor winter weather that sort of thing, having some financial foundation there support from a hedge book makes sense to us, cover those fixed costs.
So all of that as a backdrop that 25% at $4.11 in 2025, we think gets us there. Stretch it down to extreme low $2 type pricing, of course, with our NGL uplift that provides us with a high degree of comfort and confidence in where the company can land financially for 2025 and going forward. The foot side of that is we like the 25% hedged and the 75% or a significant portion unhedged in 2025 just because of the fundamentals. Significant demand coming online as we look at production trends that Dennis just touched on across the U.S. declining production levels, rig count deployed across various basins, basin wide decline rates outside of Marcellus and even within the Marcellus or certain producers. We are set up to what we believe is a really compelling shift in the supply demand equation both for natural gas and natural gas liquids in 2025.
