Got a lot of nice collars that allow for protection a little bit below where we are, but then quite a bit higher, including some of the $90 range and such. Just to elaborate there David, just a little bit more on the de-leveraging profile that we see with this asset. Coming out of the gates, we may be kind of in the neighborhood, 1.3, 1.4 times levered. But then we hope to pay down quite a bit of debt here in the back half of the year. As we described first quarter we have quite a bit of CapEx, may have a slight outspend second quarter roughly the same but then back half really start to pay that down. And then with that increasing EBITDA, you’re going to see leverage come down. We’re hoping to get it down to about one times by the end of the year.
So that gives us a little bit more flexibility potentially with hedging, but you can expect that we’ll be hedged going forward.
Unidentified Analyst: Great. That answers my questions. Thanks guys.
Operator: We have a follow-up question from the line of John White with ROTH MKM Capital. Please go ahead.
John White: Thank you, operator. I was going to ask about power sales to third parties which was just asked and answered by David. Thank you.
Operator: We also have a follow-up question from the line of Jeff Robertson with Water Tower Research. Please go ahead.
Jeff Robertson: Thanks. Kevin, back up to I think part of what Neal was asking earlier, can you talk about how you think about the flexibility that the New Mexico assets provide in terms of capital allocation and competition for capital between your legacy assets in Texas and now the new operating area?
Kevin Riley: Sure. Happy to. The term competing for capital, I see that and so many competitors press releases and I recognize the concept there. But I think we’re thrilled the fact that while this does compete for capital, in a lot of ways the asset is very similar. We’ve got a whole lot of tier-one wells that we see as good or some even better than our best over in Yoakum. And we’re going to really mix in the allocation there. For the most part, the way we’ve guided both the activity and the spend in the budget we’ve just disclosed. It really doesn’t stray too much in taking away from the legacy. It’s really just added Jeff. And so we’ve got a similar amount of wells and frankly and DNC type of investing over on the legacy kind of Yoakum properties slightly less EOR spend and hence the lower year-over-year effective total spend on the legacy.
Whereas, the new we’re reinvesting roughly half of the asset level EBITDAX. And so, I think it’s a really proportionate amount of allocation there. If you think of the acquisition, kind of cost and such as roughly half of where we are, it’s really proportionate there.
Jeff Robertson: So Philip is the right way to think about it. Then you have more geographic diversity and a new asset that’s still released the way you initially planned capital will generate pretty substantial excess cash flow that you can allocate as you see fit?