Gregg Brody: Great. And you made some comments about paying down debt, and that’s the focus right now and obviously, M&A is still part of the equation. When does — I know I’m the debt guy asking this. I’m curious, when do you think about returning cash to shareholders and in terms of dividends or buybacks? Like, how does that fit into how you’re thinking about things this year?
Bryan Lemmerman: Yeah. This is Bryan. I think we’ve been pretty consistent in how we’ve messaged in the past, and I don’t think we’re really going to change here. We would like to see our rolling net debt to EBITDA, not on a forward-looking get below 1 times. And we have a good line of sight of that happening later this year towards the end of the year. And I think, we’ll have a serious discussion about a dividend policy, what that would look like at that point. It will be important to see what the commodity price environment is looking forward. we want to be very careful about putting a policy in place that can be sustained through cycles. So we’re watching what others are doing. The successes and maybe some of the — not so successes. And when we get to the point below that 1 times leverage, we’ll put something in place that’s very well thought out.
Gregg Brody: And then what about just the share buyback program utilizing?
Bryan Lemmerman: The share buyback program, obviously, is more flexible than the dividend policy. So when we get below 1 times with the free cash flow generation, that’s definitely something we would look at.
Gregg Brody: Okay, guys. Thank you for the time.
Bryan Lemmerman: Thank you.
Operator: And we do have our last question comes from the line of Derrick Whitfield with Stifel. Your line is open.
Derrick Whitfield: Thanks. Good morning, all and congrats on a solid year end update.
Bryan Lemmerman: Thanks, Derrick.
Derrick Whitfield: For my first question, I wanted to lean in on the inventory additions in the Midland Basin. Based on your subsurface work, would it be safe to assume these locations are competitive with underwritten inventory and could be developed without material depletion concerns?
Kyle Coldiron: Yeah, Derrick. This is Kyle. So yes, I think you’re right that it is competitive with our core underwritten inventory kind of in the $6 breakeven range. When you look at the, the vertical separation there across the Lower Spraberry, Wolfcamp A and Wolfcamp B, you’ve got about 350 feet between the Lower Spraberry and the Wolfcamp A and another 350 feet between the A and the Upper B target that we develop. The other thing that we do is, we always kind of go in and wine rack that development. And ultimately, what we’ve seen is that, that helps prevent vertical interference that can occur. And so that’s a part of our development strategy as well. And we are — we’ve underwritten these locations coming out with that today, and then we’re putting our dollars to work in that area this year, and we’re going to do a co-development of the Lower Spraberry A and the B there.
Derrick Whitfield: Terrific. And either for you or Katie, I mean it’s clear you guys are coming out of the gate really strong in Delaware. Could you speak to what, in your view is driving well performance versus the historical results and the composition of the units you’re bringing online by interval? And I’m really speaking to more of the recent turn in lines just we have a good baseline comparison.
Kyle Coldiron: Yeah. So we’re — as we’ve taken over these assets, some of these wells, we’ve completed, they were drilled by previous operators and we’ve completed them. Others, we’ve drilled and completed and so ultimately, I think there’s kind of two things that are contributing to the stellar well performance that we’ve seen. One is our frac design. We put a high intensity type cluster spacing high proppant loading completion design on these wells, and we think that, that certainly contributes. But we also paired that with a spacing design, a well spacing design that we think is optimal for the area. What we’ve seen over time is that operators have over drilled they’re kind of two tightly spaced wells, and you’ve seen a lot of operators moving to a wider spacing solution Fortunately, we underwrote a four well per section solution from the very beginning. And I think you can see that the well results that we’re seeing are supportive of that as being the right path.
Derrick Whitfield: Terrific. One last, if I could, maybe for Jason. I wanted to ask, if you could speak to the A&D environment and the Permian at present. The recent flurry of bills, we are seeing our signing an increasing amount of value to inventory. But how do you guys look at the market and the opportunities that are ahead of you?
Jason Pigott: Yeah. I mentioned, we will — we’re continuing to evaluate it. There are things on the market today. There’s things that are coming. Again, you’ve got your Diamondback and [indiscernible] that have announced they would potentially do divestitures. So we’re watching some of those come — like waiting for those to come to the market as well. I think we’re going to just going to continue to be very selective. And like an inventory that would be part of these, again, we’ll need to jump ahead of the inventory we’ve added today and the things we expect to add later in the year. So we’re just going to be, again, much more selective. Again, you are seeing large companies getting together and — we’re one of the few mid-caps remaining that’s out there trying to buy and aggregate these assets.
