So, we’ll have better numbers for everyone at the next call, but we would expect to see some modest level of savings. It could be single-digit type savings mid-level, but we’ll have a better answer once we get to February.
Michael Scialla: Understood. Thanks. And I guess given the longer laterals, the improved capital efficiency, sounds like your base decline rate is continuing to shallow. Can you say where maintenance CapEx, or maybe if it’s easier maintenance activity level, would need to be next year relative to 2023?
Dennis Degner: I think a way of thinking about our program for 2024 in a maintenance type scenario is around $600 million. You could see that be slightly less depending upon the setup we’re thinking about for 2025 once we start to get to February, see what kind of winter we’ve got. LNG infrastructure buildout, how that’s further progressing along. So, I think there’s several variables that we would want to take into account, but I think the way to think about our program in a maintenance scenario is about $600 million, and it would be around 50 to 60 wells. I think historically, we would’ve said 60 wells kind of year in and year out, but with the advancement in our lateral links, it could be somewhere closer to 50 depending upon what kind of inventory we would like to carry into the setup for 2025.
Michael Scialla: Very good. Thank you.
Operator: And one moment for our next question. Our next question will be coming from Jacob Roberts of TPH & Company. Your line is open.
Jacob Roberts: Morning. I think you touched on this in response to Doug earlier, but I’m just curious if you could remind us the percentage of activity that has been on prior pads in recent years and where you expect that percentage to shift to over the next, let’s say 12 to 24 months.
Dennis Degner: Yes, good morning, Jacob. Historically, we have been moving back to pads with the existing production for somewhere as low as 30%, but it’s more closer to about 50% of our activity each year. This past quarter kind of represents some of that fluctuation of what we see quarter in and quarter out where actually three quarters of our wells that we executed were on pads with existing production. But I think a good way of thinking about our program year in and year out is about half of our activity would be on pads with existing production. And again, part of that is to complement something Mark touched on a few minutes ago, and that is utilization of the gathering system, compression, pipes, and also our processing where we see those opportunities. So, moving back to those pads not only provides capital efficiency improvements, but it also translates in our ability to keep our gathering system fully utilized and our cost structure as low as possible.
Jacob Roberts: Okay. Appreciate that. And then as a second question, could you refresh us on where the understandings are on the Utica and Devonian and maybe where you hope to be and that understanding into 2024, whether it’s via your own pursuits or by peers in the area?
Dennis Degner: Well, when we think about the Utica, I’ll start off by saying, we’re awfully excited about the future potential of that asset. But when we think about our inventory runway on the Marcellus, the repeatability, we’ve got 1,500 wells that we’ve drilled and completed. We understand that, the formation incredibly well. And again, as I mentioned earlier, it’s very repeatable for us. And so, the improvements that we’ve made have really kind of underpinned the resilience of our business. When you think about the future of the organization and the inventory bidding that we have, the low breakevens that we touched on earlier, our focus is clearly on the Marcellus as we go forward. In many cases, you’re going to see others focus on the Utica because of potentially limitations they have either in their Marcellus inventory or the quality of that inventory they have.
We think we can be patient. We can sit back. We can do industry surveillance, watch what others are doing, and then translate that into how we would advance the technical model in the years that follow for the opportunity when we would like to pull that into the program on more of an active basis. But again, we’re highly focused on the Marcellus and for obvious reasons when you look at the cost associated with it, the efficiencies, and on top of it, just the depth and quality of inventory that we have.
Jacob Roberts: Thank you. Appreciate the time.
Operator: And one moment for our next question. Our next question will be coming from Arun Jayaram of J.P. Morgan Securities. Your line is open.
Arun Jayaram: Yes. Good morning. Dennis, I wanted to start with maybe a housekeeping question. The fourth quarter guide on volumes that you provided on the call, looks to be a touch shy of the Street and what we’re modeling, and maybe we’re a little surprised just given kind of the pull forward of activity, but any drivers of that that you could point to?
Dennis Degner: Yes, good morning, Arun. I think what I would point to is really the extended laterals that we’ve been completing. I think if you look at Q3, good example is the 21,000 foot laterals and having that maintenance level program, coupled with a gathering system that we’re keeping full. So, what it’s going to do is, it’s going to allow us to keep production flatter as we start to transition into Q1. If you think about the past several years and what maintenance has looked like, we tend to have our highest production in the back half of the year. But then you’re going to see some decline in the first portion of the year as we start to then catch back up with that higher activity cadence in the first half that translates into the uptick in production in the back half.
We think this is going to actually translate into a little bit more of a level-loaded production profile as we come out of Q4 through the winter months where we have improved pricing, and then through not only the first part of Q1, but then at the start of Q2. So, a little bit differently what we’ve seen the past couple of years.
Arun Jayaram: That’s helpful. Maybe next one is for Mark. Mark, you’re really approaching your debt reduction or your leverage target or your gross debt target. Pardon me. And I just wanted to see if you could kind of give us a sense of, from a timing perspective, when you expect to get there, and thoughts on cash return as we move into a better part of the gas cycle.
Mark Scucchi: Sure. That’s a tough question to answer, given the month in which we pass it, the target range. If I had a perfect crystal ball for the weather and the pricing this winter, we’d be able to do that. But I think what you’re pointing to is the fact that we are right there on the doorstep of entering the target threshold. We think we’re in a great spot already with the balance sheet, and that gives us flexibility today, but even more flexibility, we fully expect next year to use free cash flow and redeploy it, whether it’s through incremental share repurchases, whether there’s a modest increase in the dividend, whether there’s other forms of reinvestment directly into the business, that gives us additional latitude.
