And I think we have other levers to pull in front of us, our cost of capital. I think the scale of the company, we can start to look at cheaper forms of cost of capital. And then last but not least, the ingredient that we’re going to look at as we get the balance sheet below one times is a shareholder return program. We think we put all that together. And we think that people should — investors should really be looking at the company and looking at some of our peers and see the upside here.
Leo Mariani: Okay. That’s helpful for sure. And I guess I was hoping you could also maybe just discuss in a little bit more detail the confidence of the company to kind of come out and raise the production guidance after kind of only one quarter here with kind of three quarters to left on the year. Can you maybe just talk about the key things that are allowing you to raise the guidance this year?
Sean Woolverton: Yes. It’s something that it’s always a great position to be in, right? It’s the base is performing well. We have a very active team that’s ensuring that we’re minimizing the decline of the base. So that’s where it starts. And then it’s looking at the capital program. And we think we put a series of slides in the deck and maybe I’ll reference a couple of them. But we continue to drill and complete faster. Slide 13 is a great demonstration of that. And I’ll tell you we’re just really crushing it is on the completion side. Our completion team is now probably getting 80% — 75% to 80% efficiencies meaning that we’re pumping 18 to 19 hours a day. So that accelerated time frame to bring wells on brings more production into the year.
But like I mentioned in my comments, it’s also at a lower cost because of those efficiencies. So it just gives us more capital to work with. So base, capital efficiency, then well performance. We’ve got a couple of slides, Slide 19 and 17 in the slide deck that show wells that we brought on this year that are significantly exceeding our historical well performance or I shouldn’t say our historical well performance, but operators — positions we have acquired from other operators. We point out the production and we’ve already talked a little bit about it on the block, the 25,000 acre block. We’re way outperforming there. Those wells through April now have just really exceeded the expectations. In our Central Oil area that we acquired from Sundance, we’ve had great performance.
That’s shown on Slide 17. And in the Eastern Extension, that was that great deal we did where we put Teal, a private operator, together with the position from Conoco to consolidate that block. We call it Eastern Extension. We brought on some great wells there, and you can see how we’re outperforming historical performance. So base, capital, well performance, we throw in refracs, and we have capital savings that we’re demonstrating from the capital program that are going to allow us to put more refracs in the year. We think we’ll probably do 8 to 10 of those a year. So we’ll do more of them as capital becomes available. If the team continues to save capital quarter-over-quarter that will free us up. And I’ll just say we’ll remain committed, though there’re only a 75% reinvestment rate.
So a lot of detail there, but hopefully it gives you how we view our line of sight and confidence on the forecast.
Leo Mariani: Yes, that’s very helpful for sure. And then just on governance, you spoke to that in terms of some of the changes that you’re making or that you’re planning to make here. What’s kind of the team’s current thinking on the poison pill that’s in place?
Sean Woolverton: The poison pill is something that, hopefully, through all the information that’s been put out there, gives investors some clarity on why it’s there. We’ve got a shareholder that is trying to really force an asset on to our shareholders that they have significant value destruction around. So we were — I’ve been asked this question quite a bit over the last couple of years. This proxy fight has allowed a lot of the, hopefully, information around why it’s out there to give clarity to shareholders. It continues to be something, well, I guess I’ll say, the Board will always evaluate what’s in best interest for our shareholders and we’ll continue to do that. I’ll probably close with saying the poison pill is due to expire the day after our upcoming Shareholder Meeting.
On that front, what we’ve heard from the activist investor is that the poison pills in place to keep management entrenched and that we wouldn’t do a deal around it. It’s been the exact opposite. With the pill in place, we negotiated a deal, went almost to the finish line with that activist investor and they didn’t close. So I think that’s proof that the pill isn’t restricting management or Board from doing a deal. In fact, it brought a deal to the table. So maybe I’ll close with that.
Leo Mariani: Thanks for all the color.
Sean Woolverton: Yes, appreciate the question.
Operator: Your next question comes from the line of Kevin MacCurdy from Pickering Energy Partners. Your line is open.
Kevin MacCurdy: Hey, good morning. Just looking at the 2Q guide, it looks like oil production is kind of flattish after growing significantly in the first quarter and then the full year guide implies more growth. Just kind of curious how the activity plays into that trajectory? And is there any effect from the activity restrictions on the Chesapeake acreage?
Sean Woolverton: Hey, Kevin, good morning. Yes, let me, maybe walk you through some of it. We came into the quarter, brought on a third rig in the early part of the first quarter. Brought on, I think, was it, Jeff, 12 wells in the quarter. But in February, we moved two of the rigs onto a 10 well pad on the Chesapeake asset. So as you might expect, the till turn for second quarter is lower as we complete that 10 well pad. So for the second quarter, we’re anticipating bringing on seven tills for the quarter. So 2Q will be the low. We’re moving in and starting to frac that 10 well pad as we speak. You think about that. These are long laterals. We have well over 500 stages that we’re going to frac there. So with all the frac efficiencies, the team will probably exceed expectations again.
And right now, we’re scheduled to bring that pad on late in 2Q, but maybe we can, with efficiencies, pull it up a little bit. But 2Q will definitely be kind of the low in tills, and then 3Q will ramp as — and 4Q kind of flattens out. We will drop down to two rigs in the second half of the year. So that’s why you start to see 4Q kind of flatten and layer out. The only lever we have to pull and I mentioned it on the question from Leo is we have some refracs that we could do more of those if we want to if we have CapEx that becomes available.
