But to be clear, our 2024 plan does not require the issuance of permits to drill a new well. Until the litigation is successfully resolved, we will execute on our tried and true operating plan to maintain production through workovers, sidetracks and accretive bolt-on acquisitions. The Uinta Basin is an important part of our portfolio, and we’ve been monitoring the horizontal play in the north and east part of our acreage for some time. Other operators are having success, and now the play is close to our acreage. We recently signed an agreement to farm into 4 horizontal wells that immediately offset our acreage. These wells have been drilled and subject to customary closing conditions, we will participate in their completion, which is scheduled for late in the second quarter.
If the wells are successful, the knowledge gain will help us define a development plan for our acreage. Right now, we believe that approximately 22,000 net acres could be prospective. Overall, Berry’s strategy and priorities remain consistent for 2024 with a commitment to maximize shareholder returns. Our business model is simple. We produce oil and gas from prolific basins. We have a track record of proven performance, and we deliver value through sustainable cash returns. And with that, I’ll turn the call over to the operator for questions.
Operator: [Operator Instructions] And it’s from Charles Meade with Johnson Rice.
Charles Meade: Fernando, you dropped a number of interesting details in your prepared remarks, but I just want to follow up on 2 of them. First, you mentioned that the appellate ruling on the permitting dispute, I guess, is expected mid-April. I guess just 2 questions with response to that. And I understand that there’s nothing in your guidance or your plan that assumes anything favorable there. But if you did get something favorable, how quickly would you be able to respond? Or perhaps if you did get a favorable ruling is the most likely scenario that it would be immediately appealed to the Supreme Court of California.
Fernando Araujo: If we do get a positive ruling — no, we have already submitted several wells. I think it’s on the other 75 wells submitting pending approval from CalGEM. So those wells would have to be — we’ll have to go through their process and get approved. Now in terms of getting ready operationally, it’s going to take a little time because there’s been some equipment that’s left the basin just because of the lack of activity. But we would expect to have additional possibly additional activity in the second half of the year. It wouldn’t really affect production that much this year. If anything, it would just be additional capital dollars spend drilling wells. And I think Danny is going to follow up. Danielle Hunter, our President, she’s going to follow up with some comments.
Danielle Hunter: Yes, I’ll respond on the second part of that question. We don’t have any idea if the plaintiffs would appeal an adverse ruling or not, that’s anybody’s guess. In terms of whether the supreme court takes it up based on conversations we’ve had with Counsel, told, typically, there’s a 15% to 20% chance that they would actually take up the case. And if they do, we don’t know if they would keep the stay in place during that time. So that’s not something that’s automatic. So while the supreme court, let’s say, they do appeal it. The supreme court does take it up. There’s still a good chance that it would be in effect during that time.
Charles Meade: Got it. That’s an important elaboration. And then second, the — Fernando, you talked about these deeper zones at deeper test at Midway Sunset. Are those — can you talk about what that is? I mean that’s still current county. So these can’t be — or at least it seems like these can’t be new wells? Are these — are you working over wells and going — are going down the hole, or are you sidetracking deeper perhaps? Can you just elaborate on what you’re doing there and — because those are attractive production rates for you guys?
Fernando Araujo: Yes. Now that’s right. And both wells that we drilled at the end of last year were sidetracked, and we sidetrack to deeper reservoirs. As I’ve mentioned in my remarks, we were currently producing from 2 wells so far. They’re testing in the low triple digits, which is very encouraging. They’re testing from the lowest reservoir. And we’re testing light oil, Charles, that’s a 32 to 34 API oil from the Santos formation. And one important thing to note is that it is recoverable without steam injection, which is very good. At the same time, from those wells, we’re producing about 300 Mcf a day of gas, and we are capturing that gas to actually generate steam in our 21c facility. So that’s really good because we’re saving on fuel from that perspective.
And just a little more color on it is, remember, Charles, that this is an undeveloped block on the north end of Midway-Sunset, it’s a block that’s divided into several fold blocks. There’s 4 fold blocks, and we have stacked reservoirs. So it’s very encouraging, and it could have a significant upside potential for us in the future.
