Kevin Riley: horizontally, they’ve got 15 wells, so they have put in multiple disposals. They have approximately 70 miles of gathering line. There’s plenty of oil and natural gas infrastructure that’s currently in place. So outside of lane, just small lines that connect to new facilities or new pad sites, we don’t anticipate any large infrastructure CapEx in the foreseeable future.
Jeff Robertson: Kevin is there €“ are there any take €“ I couldn’t hear the first part of your response. Are there any takeaway constraints or anything like that that affects that area €“ or those the assets of that area?
Kevin Riley: No, there are not. I’m sorry about the connection, but we do not have any takeaway constraints at this point in that area.
Jeff Robertson: Okay. Are there
Philip Riley: Jeff, incremental €“ this is Philip. I’m sorry to interrupt. I just add to that, we’re excited. It’s actually a less remote area, this Eddy County area as we surely know than where we are in Yoakum. And so we have quite a few options actually more than one midstream provider, so that provides a little bit of competition and we like what we see out there with lots of different options.
Jeff Robertson: Okay. Philip, do you have some flexibility with the midstream contracts you will inherit to try to maximize €“ to do anything that might be able to maximize economics versus what the prior operators were doing?
Philip Riley: I think we do over the medium term, not immediately out of the gate. Yes is the short answer.
Jeff Robertson: Question on the power project that the first phase is due in, I think in middle of this year in June, the second phase late this year, early next. Can you talk about what impact that might have on either just your operating efficiency in Yoakum County and/or your operating costs?
Philip Riley: Yes. So at a high level, we are doing this first and foremost just to improve operational quality. What you may see from the public point of view may not be quite so visible, but we can assure you that it is meaningful to us behind. Power €“ we’ve got fluctuating power quality, dirty power that affects everything from line pressures to you’ve got something and you’ve got an outage and an ESP, electric submersible pump. If you lose it, it drops, it ends up being a costly workover. So it really ripples throughout the operations there. And we hope that improves just overall oil production, which at the end of the day, more than anything else, every barrel we can produce more makes the biggest impact to our business.
At the same time, the second tenant, I guess would be cost €“ controlling costs. I don’t know that we’re out of the gate is going to drop costs so much as what we see is hopefully controlling the cost increases going forward. Clearly, it’s been a very volatile time for natural gas pricing. And we’re in a lower environment €“ vastly lower environment now than we were last year. But on the margin, we certainly see volatility increasing or continuing. And then prices, we certainly say gas prices could be high again. We have an increasingly intermittent grid, but with gas price often influencing obviously power prices in our region. So on the whole, we’re hoping to kind of control those costs. We’ve got an increasing load with our continued growth out there with some compressors.