Alan Armstrong: Yes. Good question, Tristan. I would just say we were really pleased with multiple, we were able to pick up the MountainWest assets pretty seldom that you get assets that are – that well contracted that have that much growth around them, which frankly has been more than we even expected. Pretty rare to see that kind of multiple. I think that the issue there that kind of dampen the market was the concerns over Hart-Scott-Rodino that had been raised earlier in the Berkshire Hathaway and Dominion transaction that involved those assets. And I think that had the market a little bit spooked on that. So maybe that’s why we were able to bridge over that in that case. But yes, so I would say, we’re going to keep looking for those anomalies like that and where we have confidence in our ability to add value to assets.
But I think it’s going to be rare circumstances that we see those kind of multiple. There’s usually a reason in this case, I think a lot of the issue was the risk around Hart-Scott-Rodino that it already surfaced itself on those assets earlier.
Tristan Richardson: That’s helpful, Alan. And then maybe just a question on MountainWest, I mean, with the Overthrust Expansion, sounded like that was maybe incremental to your expectations or at least what you saw as the opportunity set for the acquisition at the time of close. Maybe curious kind of is one of potentially other expansions that it could occur. And then maybe if there’s anything on the scale and timing of that project that you didn’t already mention.
Alan Armstrong: Mike, do you want to take that?
Michael Dunn: Yes. Tristan that was not in our pro forma economics for the acquisition. So it’s certainly a pleasant upside there with the MountainWest acquisition. This is about an 11% increase in the Overthrust capacity for the 325,000 dekatherms a day expansion. And it’s a pretty simple expansion. It is two compressors that we’re adding at existing compression facilities on that system, but there’s definitely more upside opportunity there. There seems to be a desire to get more gas Westbound toward the Opal pricing point. That’s been a pretty solid pricing point for a number of years now. And even this summer, we’ve seen gas trading at $4 there at the Opal hub, even higher than that, just driven by California economics with the heat that hits California this summer and gas generation that’s picking up there.
So I would expect to see a lot of desire for customers to get to that Opal pricing point. And that certainly bodes well for Overthrust at the direct connection into that hub. And as far as the rest of the MountainWest system, we see a lot of opportunity there for coal to gas switching. There’s a number of very large coal-fired power plants in Wyoming and Utah that do have opportunities for conversion to natural gas. And some of those we’ve already acquired and we’re actually building expansions for off the Overthrust system today in Bridger Units 1 and 2 in Wyoming on the [indiscernible] system are converting to gas. And we’re building a pipeline over to the – that facility this year. So we’ll continue to see opportunities like that on the MountainWest system and those are certainly upside opportunities, not only for us, but gas will be sourced out of the Wamsutter field with our Upstream production and we’re driving that gas to those markets as well with the secret platform.
Tristan Richardson: That’s great. Appreciate it. Thank you, Mike.
Operator: Thank you. We go next now to Gabriel Moreen at Mizuho.
Gabriel Moreen: Hey, good morning, everyone. It looks like you had a lot of E&P hedges since your last update in 1Q. I was just wondering if you can not to beat a dead horse on 2023 guidance, which I know I’m doing, but just what the exposure is at this point on the E&P side, and then also as you think about hedging 2024 for on the E&P side, which what you’re thinking, and maybe in light of also potentially doing some transactions around E&P with the gas curve having creeped up a little bit here.
Alan Armstrong: Yes John, you want to take the first part of that and I’ll take the last?
John Porter: Yes. Absolutely. We have continued to add hedges on the expected Upstream JV production. We generally don’t go too far in hedging. We like to have a comfortable spread between what’s hedged and what’s not hedged, just to account for the potential for any kind of production offset. So there is a fairly significant portion that that remains unhedged. We do provide in our materials all of the current hedges that we have outstanding against the Upstream business and that’s in the appendix.
Alan Armstrong: Yes. And Gabe, I would just add to that, I think in terms of our approach to hedging on the E&P side, we have been putting on some April through October hedges for gas in 2024. And as John said, large – so part of that’s driven by the fact that we don’t really want to get caught short in an up market. I think everybody experienced that a couple of years ago. And so we tend to not get ourselves in a position where we could get caught short on production, particularly since we don’t operate that production. So that’s how we think about hedging on the E&P side there. So – but in terms of the – in the broader scheme of things, in terms of transactions around E&P, I would just say we continue to entertain a lot of interest in that.
And I would just say I – as we look at the landscape and the demand that’s building for not just – everybody’s very focused on LNG and we think obviously that’s going to continue to be a big driver for demand, but the macro picture we’re seeing around electrification and the amount of power demand increase that continues to build in this country is pretty impressive. And we’re also seeing a lot of industrial demand pick up in and around our assets as well, and things that were previously powered by either fuel oil or coal or onshoring ammonia production here in the U.S. there’s just a lot of demand building and we have a pretty good insight to that. So it’s kind of seems shortsighted to get in a hurry to sell out particularly at like the Haynesville where the team, the GeoSouthern team has done a great job there and they continue to find ways to lower cost and increase production there.
