Greetings and welcome to the NOG Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It’s now my pleasure to introduce your host, Evelyn Infurna, Vice President, Investor Relations. Thank you. You may begin.

Good morning. Welcome to NOG’s third quarter 2023 earnings conference call. Yesterday, after the market closed, we released our financial results for the third quarter. You can access our press release and presentation on our Investor Relations website. Our Form 10-Q will be filed with the SEC within the next few days. I’m joined this morning by our Chief Executive Officer, Nick O’Grady; our President, Adam Dirlam; and our Chief Financial Officer, Chad Allen; and our Chief Technical Officer, Jim Evans. Our agenda for today’s call is as follows. Nick will provide his remarks on the quarter and our recent accomplishments, and Adam will give you an overview of our operations and business development activities, and Chad will review our third quarter financials and walk you through updates to our 2023 guidance. After our prepared remarks, the executive team will be available to answer any questions. Before we begin, let me cover our Safe Harbor language. Please be advised that our remarks today, including the answers to your questions, may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by our forward-looking statements. Those risks include, among others, matters that we have described in our earnings release, as well as in our filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We disclaim any obligation to update these forward-looking statements. During today’s call, we may discuss certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, and free cash flow. Reconciliations of these measures to the closest GAAP measures can be found in our earnings release. With that, I’ll turn the call over to Nick.…

Thanks Nick. In the third quarter, we saw an acceleration of activity on all fronts, setting up for a solid 2024 campaign. I’ll start by reviewing this quarter’s operations and then turn to the M&A landscape and our business development efforts. During the third quarter, turned in-lines rebounded to a company record of 22.6 net wells, a 64% increase quarter-over-quarter. Our organic assets did the heavy lifting with 18.9 net well additions, while our Ground Game turned in-line 3.7 net wells, the majority of which came online towards the end of the quarter. Activity had a healthy balance between the Williston and the Permian, and as we enter the fourth quarter, we expect to see elevated turned in-lines before seasonal easing during the winter period. Well performance has been encouraging as our Mascot prospect continues to outperform expectations, and while it is early, our new operating partners in vital, Earthstone, and soon-to-be Permian Resources have all been making improvements to our recently acquired co-developed assets. Continuing with the theme of acceleration, our wells in process again grew to an all-time high as we ended the quarter at 74.2 net wells, a nearly 10% increase quarter-over-quarter. Driving activity levels, our organic acreage added 14.6 net wells and accounted for one-third of our Permian activity as our acquired acreage over the last two years continues to show its value. We added another 9.3 net wells from the closing of our Novo transaction, and the Ground Game accounted for an additional 5.5 net wells. In total, the Williston and Permian combined to account for nearly 80% of our wells in process, while the Permian has grown to 60% of our oil-weighted wells on the D&C List. As we have taken market share, we’ve also seen our average working interest grow to 13% from…

Thanks Adam. I’ll start by reviewing our third quarter results and provide additional color on the operating update we released on October 25th. Our Q3 average daily production topped 100,000 Boe per day for the first time in company history, a 13% increase compared to last quarter. Oil volumes were up 16% over Q2 as we rolled in our Forge and Novo acquisitions and benefited from the reversal of most of the prior deferments in the back half of the quarter, but the real story is the addition of record levels of turned in-line wells and the continued strong well performance across all of our basins. Our adjusted EBITDA was $385.5 million in Q3, up 32% over the same period last year, and our third quarter free cash flow was $127.8 million despite continued elevated levels of organic and inorganic investment, commodity price volatility, and to a lesser extent TIL deferrals. Adjusted EPS was $1.73 per diluted share. Oil realizations were better than internally expected due to continued strong in-basin pricing and a higher percentage of barrels coming from the Permian, which is typically priced tighter than the Williston. Natural gas realizations were 82% of benchmark prices for the third quarter, below our year-to-date run rate, with realized actuals in the Marcellus down over 30% from last quarter as basis spreads widened for the shoulder season. The biggest driver is the NGL to natural gas ratio, which moved back to more normalized levels in the quarter as NGL prices were relatively flat quarter-over-quarter and natural gas prices were higher. LOE came in at $8.76 per Boe, below our annual guidance range, driven primarily by increased Permian volumes, which have a lower cost structure than the Williston. On the CapEx front, we invested $216.6 million in drilling, development, and ground game…

Thank you. At this time, we will conduct a question-and-answer session. [Operator Instructions] And our first question came from Scott Hanold, RBC Capital Markets. Please sir, go ahead.

Yes thanks. Good morning, all. Hey, Nick, I can’t help thinking back a few years ago when you and I chatted with Brom about just growing scale, what’s important for the long-term for Northern, and certainly you guys have moved quite a bit from that, I think, up somewhere around three-fold. When you kind of think about the future and the opportunities that you see in front of you and just in general the maturation of certain parts of the U.S., like, is there an optimal level you think that there is for Northern? And if you could also kind of parlay into this answer, how does the higher interest rates kind of impact your ability to kind of do M&A transactions or see just things out there? Nick O’Grady: Yes, I mean, I think I will answer the latter part first, Scott. When the cost of capital goes up, so too do the discount rates, and so we’ve observed that clearing discount rates have risen. From a strategic perspective, it’s definitely benefited us as our cost of capital has probably been more static than that of our private peers, and they just require bank capital or things like that, so it’s definitely helped us. But you see it particularly, you saw kind of a wave in the last couple years of people using asset-backed securitizations to finance PDP-heavy acquisitions, and that game gets really tough when base rates are over 5%. To the other point, I think, I got asked this question recently by one of our investors, and I think, my answer would be our fiduciary responsibility as a company is not to decide what size is the right size. Really our job is to earn high returns, and grow the business and make more money for our stockholders. And I think that that’s our path going forward. And I think while shale overall is maturing from a non-operated perspective, I think, it’s wide open for us. The opportunity set in front of us is as big relative to the size of our company as it was three or four years ago, and so I feel very confident that our team can continue the path that we have. From a law of large numbers, maybe that percentage doesn’t move quite at the same pace, but from an opportunity set, frankly, we are as busy as we’ve ever been. I don’t know, Adam, if you want to add to that.

I think it touched on the majority of it, scale begets opportunity, right, and I believe I touched on it in my prepared remarks in terms of kind of the different structures that are now available to us. I think that gives us the optionality to deploy capital where we see fit. If you rewind five years ago, it was really just the ground game and the non-op packages that we’re beholden to, and now we’re looking at co-bidding exercises, minority interest buy-downs, joint development agreements, and all of that is at scale, right. And so I think we are a much larger and better capital provider and partner to a lot of our other operating partners that gives us significantly more opportunity.

Okay, appreciate that. And as my follow-up, I know it’s going to be a little bit early for your 2014 – 2024 thoughts, but I was kind of curious, especially with respect to the Mascot, which was your first JV, you talked about the well looking good. Can you talk about the pace of that – going – the pace of completions for that and production going into next year and just your kind of thoughts on how that sets you up for 2024? Nick O’Grady: Well, I’ll cover just a little bit, which is obviously we shifted some of the development into 2024, and so it really would have been peaking, I think, both in terms of volumes and in terms of capital in the fourth quarter, and some of that shifts out. I mean, I think that the next batch of wells is really, it’s obviously been performing extremely well, and we would expect that the next major batch of wells comes on sort of early in the second quarter. Adam?

Yes, performance is kind of at 13% better overall versus kind of our forecast, Scott. And as far as kind of the modified schedule goes that we discussed last quarter, we’d expect production to decline a little bit in the fourth and the first quarter, and then begin ramping materially in late March. So, to Nick’s point, that’s when the larger batch of wells come online.

Okay. So then from an overall cadence perspective, I mean, you guys should be starting next year in a pretty good spot overall. Nick O’Grady: Yes.

Yes, I think Q2 and Q3 is really where we see kind of the bulk of the tills coming on the Mascot project. Nick O’Grady: Yes. And we typically see a seasonal slowdown in the first quarter, particularly in the Williston just around kind of the winter weather piece, but that’s been the pattern for almost every year.

Right. Okay, thank you.

Our next question came from Neal Dingmann, Truist Securities.

[Indiscernible]. Nick, my first question is on M&A. Specifically, it sounds to me like you all have more than, I mean, continue to have now more than ample M&A opportunities ahead, having the – what I call, the non-op market cornered. I am just wondering, can you speak now when you look at your deal criteria, how these requirements have changed, maybe different standards today versus when you were looking at maybe a year or two ago, because again, it just seems like just how creative the deals are today. So, I’m just wondering, like when you and Adam, Chad are looking at some of these deals, how the requirements have shifted. Nick O’Grady: Yes, I mean, I think, discount rates have definitively gone up. It doesn’t always show up in the multiple, Neal, the multiple is going to be a function of the longer term growth and value of the undeveloped piece, right? So, the short term multiple to the investors might not seem obvious, but we’ve seen in the last three or four years, probably even on the ground, probably a thousand basis point increase in our own clearing price. And that’s a function of the cost of capital, it’s also a function of where we’re targeting. And we’ve really changed some of our focus to where we feel like we can get a much – we’ve become much more critical to that part. That’s generally through concentration or scale and size. I don’t know if you want to answer the other part?

Yes, I mean, as far as the criteria qualitatively, I think, we’re relatively agnostic in terms of overall structure. It’s really going to boil down to the overall rate of return and asset level returns there. So, we are never going to change our stripes in that regard. Big deal, small deal all take the same amount of time. And so, I think where that probably comes into play a little bit more is the ground gain side, right, is a 1% working interest really going to move the needle for us? And frankly, when you get into the larger ground game deals, the higher concentration the competition is relatively limited, right, when you think about your competition and what their capital pool is and how they want to diversify kind of their capital allocation. So, we’ve definitely stepped up in that regard. But as far as overall structure or quality, those types of things, I think, we are going to continue to just stay the course with what we’ve done in the past. And as far as where those opportunities are located, let’s say primarily that’s going to be in the basins where we are at. Permian, obviously, with the rig level activities there and the Delaware, to be a bit more specific is generally where we are seeing those opportunities. But we’ve been surprised about some of the things that have come to market and we’ve been approached on in the Appalachia, as well as the Bakken.

Okay.

Not to mention, the Haynesville, does that work in this particular price environment, maybe, maybe not. Then you’ve got, the Eagle Ford, that’s been an area of interest, but given the maturity and the way things are blocked up there, we just haven’t found the right asset. DJ, Great Rock, got to obviously take into consideration the political environment there. And so I think, a lot of these other places – I forgot the Utica, that’s been interesting. Obviously, you’ve got to be under the right operators there. And so kind of those four areas are areas where we’re obviously keeping our ear to the ground, but they’re going to have a much higher bar than to get things turning. Nick O’Grady: Yes, I think the one thing you have to take into account is the commodity environment we are in. I mean, commodity prices are relatively high. And so we generally stick to our knitting. We want resilient assets, right? You really want to focus on lower breakeven assets, especially in an environment like this, because whatever the discount rate is, the sensitivity on the discount rate is going to be very different depending on if you see a pullback in prices as well activity. So, not all returns are – they might be underwritten alike, but the resiliency of them are different. And that’s why you’ve generally seen us focus on higher quality assets in areas that are always active.

No, it makes total sense. And then, Nick, just secondly, maybe I am trying to get an idea of how do you – you gave some good ground game update, as well as your dividend growth, you recently just talked about that. And I am just wondering, kind of going forward, how do you sort of balance that the production and shareholder return growth? Nick O’Grady: Yes, I mean, I think, that is the special sauce. And I think that in general we want to be more conservative by nature, Neal. And so, I think that in terms of raising the dividend early, it’s about $2 million additional capital this year than we’ve previously planned. I think the board was very confident that we were there. And we’ve obviously done a ton of hedging and de-risking of the assets we bought over the past quarter. But over time, I think, we view there is upside to dividends. I mean, I think you can easily look at the environment we’re in today and say, well, why aren’t you paying out a lot more capital? And I think it’s because we’re not just thinking about the environment we’re in, we’re thinking about the environment that could be, because I think, there is a fine balance in our business about giving everybody what they want right away versus, being a good steward of capital and thinking about the potentiality of outcomes. And so, I think we want to be purposeful. I think is there upside to our current dividend plan? Of course, there is. And we will take that in stride as we achieve goals and as we get there. But I think we want to be careful. I also think, and you’ve heard me say this quarter after quarter, but we really…

Perfect. Thanks, guys.

And our next question comes from John Abbott, Bank of America. Please, sir, go ahead.

Hey, good morning. And thank you for taking our questions on a very busy morning. Yes, so in the opening remarks, there was some commentary related to seeing some contracts, potential costs going lower – due to contract – moving lower, as well as some operators potentially being squeezed as contracts sort of roll off. So, how do you think about, what are your thoughts as you sort of look at the Permian, and the Bakken, and maybe the Marcellus, as far as how you think costs play out next year for operators? Nick O’Grady: Yes. I mean, I think that operators are always finding ways to be more efficient, grow faster, and find ways to get more bang for their buck. And I think that’s productivity improvement, it never really stops. And so, there is always some benefit to that. I think that you have to take the practical reality, which is that you’ve had the rig count come down the completion piece, the fracking piece is the most – it’s 70% of the well cost, right. So, rig rates are down, ancillary costs from tubulars to sand are down, water handling down. But at the end of the day, those really don’t move the needle all that much unless the cost of completions go down. And that’s really going to be dictated by the number of wells being drilled and the rig count. And the number of wells being drilled don’t always foot with one another. Certainly, there is a lot of static costs in between there. And so, you have to think about the commodity environment that we’re in, right? We’ve seen commodity prices trough this year and then come back up. And so, if overall levels are stable, and you do have inflation to labor and other costs over time, I think, we view that costs are going to be relatively static unless something materially changes. If gas prices, for example, were to stay weak for another year and you see a gas activity falling off, those completion crews may have to move and compete for services, and you could see some further costs, but I don’t think we necessarily want to count on that. And so I think that, where we are now, I think things are stable. Our costs were up quarter-over-quarter, but that’s a bit of a misnomer because it’s really a function of the Permian making up a higher proportion Permian wells cost more. And secondarily, the lateral length on our wells were much longer. So on a kind of curved lateral foot basin agnostic basis, they were relatively flat. I don’t know if you want to add to that.

That’s the reason why we focus on partnering with the larger operators. The conversations that we’re having right now and you’ve seen the rig levels fall. A lot of those guys are going back to these service providers, laying down rigs in an effort to kind of keep cost low. And if you’re running 17 to 20 rigs or whatever it might be, you can still keep and maintain your operations plan, but still be able to kind of flex your muscle. And we’ve got to manage the volatility. I think Nick mentioned it last quarter on the call. If commodity prices go higher, then we’ll expect to see well costs do the same. And likewise we see a gap down then something’s got to give there. And I think as we manage all of this volatility, we’re going to stay conservative, especially as we’re going into 2024 planning.

Appreciate it. And then for our follow up question, I think this is for you there, Chad, is just with the acquisition, with the deals that you’ve done, how do you see the trajectory of cash taxes over a multi-year basis at this period of time for Northern?

Yes. I talked a little bit about it on the last call, addressed in my prepared remarks. I mean, it hasn’t really moved. We contemplated Novo in that – in that last year. We kind of knew what we had. So I think it’s still a 2024 item. It’s going to be to a lesser extent in 2024, and then obviously, it’s going to be a bit more fully loaded in 2025 and beyond.

All right. Very, very helpful. Thank you. Nick O’Grady: Thanks John.

[Operator Instructions] We will move on to our next question, which comes from the line of Paul Diamond with Citi. Please proceed with your question.

Good morning all, and thanks for taking my call. Just a quick one from me, talked a little bit about the shifting CapEx. I just wanted to get your idea on how that goes – how that goes forward into 2024? Should we think about this as more of a quickening of cadence over the course of the year? Or is it something that’s more that there was that one-time opportunity that kind of brought that block forward? Nick O’Grady: It’s a little bit of both, Paul. So, I mean, I think we saw some kind of 2024 pull forward and obviously some ad hoc capital I think. So in a sort of in a vacuum it’s in many ways a pull forward of 2024 activity. I think we still look at 2024 and our target CapEx is sort of what we want to target. And I think, look I think we can address 2024 without explicitly endorsing. We have not guided or anything like that but we’ve looked at the 2024 ranges of consensus from sell side analysts. I think it’s around 111,000 to 117,000 barrels a day equivalent and call it around 840 million in CapEx. And I said, I would say based on current pricing, et cetera, I think those are very plausible. I think the reason that we wait until the reporting year end before we share guidance. First, I think, and foremost and this is important to your question is that we’re return driven, not growth or production driven. So we want the time to take a look at all of the drilling proposals and projects in front of us and then look at the timing of those and everything from completions to overall costs to provide the optimal plan. I do think those numbers are achievable, though. And to the extent that we produce less and spend less, obviously we generate more cash. To the extent we spend more, we’d likely produce more, but generate less near-term cash. So we’ll make allocation judgments for optimal total return, whether we feel, we have those projects that meet our hurdles. But I will say, given the opportunities we’re seeing every day, it’s always a balance of meeting what we say we’re going to do and juxtaposing that with our fiduciary duties to grow and deliver profits. So, I also, just as a side note, one of the things that I always am concerned about is that we will report our year-end in February, and a lot can change in the commodity market between now and then. And so I don’t think we want to be in a position where we have to do this twice. And given how volatile it’s been and given how wacky the macro has been, it’s never been more important to do this once and to do it right.

Thank you. We’ll move on to our next question, which is coming from the line of Charles Meade with Johnson Rice. Please proceed with your question.

Good morning, Nick, Adam and Chad and the rest of the NOG Team there. Nick, I want to go back. I’m not sure it was comments that you made or that Adam made either in prepared comments or earlier in the Q&A. But you referenced about how interest rates are higher and, and that moves the hurdle rate up across the board. And I’m curious, I’ve talked to some other companies who are active in the A&D market and they have mentioned that there’s a little bit of an issue between what they were saying is a little bit of issue in the Bid/Ask spread and that the Ask side hasn’t really or had not really adjusted for this higher interest rate environment and consequently you need to use a higher discount rate on the PDPs. And so I’m curious if you are seeing that and if so, if there’s any kind of movement to a resolution or any other – anything other, any other dynamics that may be surprising given the move in the risk free rate? Nick O’Grady: Yes. I mean, I don’t think I’ve ever met anyone who didn’t think their children were more beautiful than everybody else. So is that a surprise to me that the social issues around A&D are the most important and most difficult to come over, which is that we feel like we generally have a pretty good pulse of where things are going to trade for and what they’re worth. But you can lead a horse to water, you can’t make a drink. And we spend a lot of time banging our heads against the wall with people who have wildly unrealistic expectations. You’ve seen a flurry of M&A this year at the operated and non-operated side. But there have actually been a number of failed processes that we’ve seen go dormant just because people had completely ridiculous assumptions of what their assets were worth. And so that is the thing we have to navigate, and honestly a lot of times on the front end we’ll decide or not decide to participate in something because of the counterparty and whether we think they’re a realistic seller. I mean, look, really good assets are going to still sell for good prices and weaker assets are going to get weaker prices, but I think, I don’t know, that’s the art of the deal.

Different base and same stuff, right? I mean, I think we try to be as transparent as we can in order to educate our current parties as to where we’re coming from. Maybe that’s a way that you can help bridge some of that Bid/Ask spread in terms of kind of the overall expectations that Nick alluded to, but, yes, that works. Nick O’Grady: Yes, I mean...

30%, 10% of the time. Nick O’Grady: Yes, I mean, 60% of the time [indiscernible]. I’d be remiss if I didn’t feel a movie quote or something. So I’m always reminded of the movie Trading Places and he’s trying to pawn his watch and he says, well, Philadelphia, it’s worth $50 and so we deal with that every day.

Thank you. Our next question is coming from the line of Donovan Schafer with Northland Capital Markets. Please proceed with your question.

Hey guys, thanks for taking the questions. I want to start off with the Ground Game. So it seems like you see simultaneously a lot of opportunity there, while also not a lot of competition. So it sets kind of the economics and opportunities up really attractively while at the same time like what we’ve talked about with kind of more of a lull and larger package deals and some of this Bid/Ask spread stuff on larger probably M&A. So I’m curious, like, so my understanding is maybe what’s going on with the Ground Game is it’s like, people get an AFE [ph] and they’ve got to make a decision quickly. And if it’s an operator or someone with a lot of kind of different irons in the fire and a limited budget they planned for this year. If there’s an acceleration in activity, then they’re not ready to pull the trigger on all those AFEs or consent to them? And so it kind of becomes almost like a scramble and so maybe there’s more this scramble that’s relevant to like the Ground Game kind of AFE market? And then people dealing with limited budgets, maybe some of that runs-up against ESG stuff where less capital is maybe not as quick to respond to better commodity prices and all? So that’s kind of my understanding. So, just can you confirm, like, is that what you’re seeing and that’s kind of what is happening with the Ground Game or are there other dynamics that are making it so particularly strong right now?

I think directionally you’ve got one of the themes there, right? You’ve got operators that have shareholder return requirements, dividends, buybacks, they want to drill their own wells, whatever it might be and then they’ve got their own set budget and different operators handle their non-op in different ways. Some of those folks are packaging it up and selling it. Some of them are selling them the well proposals as they get them and then you’ve got other operators in order to manage everything. What I kind of alluded to on the second quarter call where they’ve got maybe two obligation wells but it makes more sense to do cube development and they want to drill six. Well, how do you manage your capital there? You go find a non-op partner, sell down your interest, get a carrier or whatever, a promoter or whatever it might be and you drill additional wells in that regard. And so, I think that’s definitely a theme that we’ve seen. I don’t know that it’s necessarily changed in the short-term, we’ve seen that forever. I’d also add on the competition side of things, there’s definitely competition. It’s just what level of competition are you dealing with at what size of transactions? And that goes back to the comments that we made earlier on the concentration, number of wells, average working interest, all that good stuff. And so you’ve got a handful of different dynamics that are playing. You’ve also got what funds are coming into the year. Gangbusters generally were not nearly as successful on the Ground Game on front end of the year where everybody’s kind of flush with cash and they’ve got their budget set and they want to deploy it. And then by the end of the year, everybody’s kind of…

Thank you. Our next question is coming from the line of Charles Meade with Johnson Rice. Please proceed with your question.

Nick, apparently I had a copyright infringement by quoting Trading Places, and the operator cut me off, so sorry for that. Hey, the follow up question I wanted to ask was you – I think Adam mentioned in, you’re talking about the A&D opportunity set. I think you said that some things surprised you, what you’re seeing coming out of Appalachian, especially in light that you guys have been really active in the Permian in the last call 12 or 18 months. But what is surprising about what you’re seeing in Appalachian now is that kind of maybe moving back into focus for you guys? Nick O’Grady: Yes. I mean, I don’t think it ever went out of focus. I think last year we bought the asset and gas basically ripped from day one, which made it more challenging, especially gas, which is even frankly more volatile than oil, more cyclical buying. We looked at a handful of things last year and just could never get comfortable that buying stuff in a $6 environment was a good idea. But the fact is, it’s been bad for the bulk of this year and suddenly dollars start to become a lot more precious to those counterparties, and it’s shaken loose some activity and there are a lot of exciting things out there. There are also a lot of sort of special situations there were some of the more creative structures that we’ve done in recent times can be very appealing to groups that may not want to sell themselves entirely and things like that. But I do think we have to be naturally more structured in Appalachian. The land structure of Pennsylvania in particular is very different than, say, New Mexico or North Dakota. So it does, "narrow the field" in terms of how we structure these things. But I think at the end of the day when it comes to non-operated interests, many operators may want to control all that, but then when they’re bleeding money, suddenly those interests become a real thorn in their side and they need a source of capital. So I think we’ve been reviewing, I think everything under the sun in terms of structure there, but I think we’re probably a little bit more optimistic, and I think we take it each day, so don’t take it with a grain of salt, but that we can find ways to grow that position over time.

Yes. I think there was interest last year, but going back to the whole Bid/Ask spread, right? I mean, volatility is going to widen that significantly from a seller’s viewpoint and a buyer’s. And so you’ve kind of had things settle down a little bit, and so there’s maybe a little bit of a backlog. And so now I think we’re having some additional conversations with counterparties where it really didn’t even make sense to have those conversations in the past periods. Nick O’Grady: Yes. I think we want things that, if gas goes back to $2, $2.50, still work. I mean, it doesn’t have to be pretty, but they’ll work. And a lot of assets that tend to come for sale when gas is $6 look great, but the undeveloped has no value in an environment like this. I think that’s been, honestly, the challenge in the Haynesville. It’s an amazing play, but ultimately you want to be in an environment where you can have some confidence in the outlook, and I think the strip certainly gives you that confidence. But the spot price has not. I mean, obviously it’s been a little bit stronger of late, but I think that should get you there if that makes sense.

Got it. I appreciate that in detail. Thanks, guys.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I would like to pass the floor back over to Nick O’Grady for concluding remarks. Nick O’Grady: Thank you again for joining us today. We appreciate your continued support and look forward to touching base with you in the coming days and weeks. This is the way.

Thank you. Ladies and gentlemen, this does conclude today’s teleconference. If you would like to access the digital replay for today’s call, please dial (877) 660-6853 or (201) 612-7415 and enter access ID 13741092. Once again, this concludes today’s teleconference. We thank you for your participation and you may disconnect at this time.