Brian Cree: Sure, Stephen, this is Brian. We kind of mentioned, I made a quick comment on it, is that we’re seeing a little bit of accelerated activity on our asset. Typically, we think about $40 million to $50 million a year of kind of organic CapEx. That’s what we’ve talked about in the past. It’s early in the year still, but we’re actually seeing an accelerated pace. We’ve received more AFEs in the first four months of the year. That puts us on a pace for to exceed that $40 million to $50 million. So we like that. We’ve seen more three-mile laterals. Clearly, the operators are moving toward the three-mile laterals whenever they can. So, we’ve seen more of that in terms of our development. We’ve seen quite a few refracs this year, probably on a pace that exceeds what we saw in 2023 and closer to where we were in 2022.
So we’re excited about that. We think the operators continue to look at that refrac activity, but, yes, it’s, we’ve seen an accelerated pace that we’re not sure that that will continue. We’re excited about it at this point in time. We think the three-mile laterals, we know the operators are all very excited about the three-mile laterals. We have confidence in their ability to pull those together and see those as being more economic than the two-mile time will tell exactly how those play out. But the combination of all of that just gives us a higher level of excitement about 2024 than we had at the beginning of the year.
Stephen Richardson: Great. Maybe. Brian, while I’ve got you as well on the acquisitions, could you appreciate that the activity on these wellbores is going to be in the back part of the year, one based on your risking, and appreciate that you don’t have full visibility, but as you looked at it is, will you have production contribution from all these wellbores by year end? Like, will it be in the exit rate or does it trickle into Q1, Q2 of next year as you kind of looked at it and risked it.
Brian Cree: Based off our underwriting Stephen, we definitely expect all of these wells to be on at some point in time in the fourth quarter. But as you know, it’s just hard to tell for sure that’s how we’ve modeled them. We modeled things last fall when we made those acquisitions with production coming on a little slower. So, I think we do a pretty good job in our underwriting in terms of estimating timing. But as Jimmy mentioned, it’s not in our control. It is in the control of the operators. But again, these are operators that we have confidence in, and I think they’ll meet our timelines.
Stephen Richardson: Okay. Last one for me, if I could squeeze it in, was just on. Just following up on Ben’s previous comment on kind of thinking about the financial resources of the company in terms of and the reinvestment opportunity set. So if you think about that 0.6 times levered, can you just remind us where you’re happy or where you’re comfortable taking that, considering, depending on how you look at it, this is probably a little bit above kind of mid cycle oil price, but at least for most investors. So like where are you willing to take that, considering if the opportunity set continues to present itself? Thanks.
Jimmy Henderson: Yes, I’ll jump in here. This is Jimmy. Yes. I think we’ve always said that we’re going to remain, certainly under one times levered, and I think we confident that we’ll remain there with these opportunities ability to further invest. I don’t really seeing much increase from where we’re at today, is we’re getting contribution from the acquisitions that we did late last year for the remainder of the year. And then these acquisitions kick in. So, I think we’re in a really comfortable position from a leverage standpoint and a liquidity standpoint given really within our current resources.
Stephen Richardson: Great. Thanks a lot.
Operator: Thank you. Our next questions come from the line of Jeff Grampp with Alliance Global Partners. Please proceed with your questions.
Jeff Grampp: Good morning, guys. I was curious with the near-term development acquisition market obviously really, really active here so far, is that just a function of those being higher working interests. If you guys were to look at it maybe on a, I don’t know, gross deal basis, are things pretty consistent, or how might you guys characterize kind of current market dynamics versus, say 2023 or whatever reference period you’d like?
Brian Cree: Yes. Jeff, this is Brian. I’ll jump in again. The market remains, very robust at this point in time. We see a lot of deals. We still evaluate a lot of deals. As we said in the past, our hit rate is probably 10% for these. But I think, for us, when you look at those higher working interest opportunities, we’ve had a little more success there. There’s probably a lot less competition. When you’re talking about those kind of dollars versus, those in the $1 million or $2 million deal range, smaller work interest. So, yes, we’ve tried to take advantage of that. And again, it’s always very lumpy. Right. I mean, we see a lot of deals in the first quarter. We bid on a lot of things, and nothing really came to fruition. And then all of a sudden, some things come together.
So it’s just. It’s a timeline that we have to work through these, working with the various operators, the various sellers to make sure that we really understand what’s going on and bid these at the hurdle rates that we find very attractive. The one thing I will say is, just to add to your question is, while that pipeline is really good, when oil prices get higher, from our standpoint, it actually makes it a little more difficult to close some of these, because I think others will get a little more optimistic. We typically will underwrite these at a price deck that is below strip. And so when prices get a little higher, it becomes a little more difficult for us. So, really, that $70 to $75 range seems to be a great range for us, where kind of our underwriting does very well against the competition.
Jeff Grampp: That’s really helpful. I appreciate that. And maybe a question for Jimmy, hedges bumped up nicely, especially first part of 2025. Should we expect more volumes there perhaps, as these new acquisitions come online? Or how are you guys thinking about the hedge book here, especially in the context of the increased dividend?
