Operator: There are no further questions over the phone at this time. Craig, please proceed.
Craig Bryksa: Okay, I’ll pass it over to Shant. I think he has a few questions here coming in from the line.
Shant Madian: Yes, thanks, Craig. Couple questions coming in as we’ve been chatting; one, or a couple, so around cost front, one asking if we’re continuing to see any cost pressures. And someone also seeing if we’re actually seeing any cost easing. So, maybe we can give a little bit of an update on that front.
Craig Bryksa: Yes, that one is probably best for Ryan to speak to.
Ryan Gritzfeldt: Yes, I would say, in general, we’re seeing a flattening of costs and rates coming out of the recent inflationary environment here, probably led by reductions in casing steel tubing costs. But probably cost pressures still remain more on equipment utilization, labor costs, et cetera. But with that, we’re keeping our current cost estimates status quo, puts us kind of right in range of our 2023 capital budget of CAD 1.15 billion to CAD 1.25 billion. I would say couple exciting things. Upon the close of our acquisition, like Craig said, in the Montney, we had our Gold Creek type wells at around CAD 9 million to CAD 9.5 million per well range. We’ve quickly, after really only operating there for two months, been able to leverage our existing supply chain, our current service partner relationships, already reduced our casing costs, reduced some of our frac costs, specifically on sand sourcing.
And so, already have line of sight to sub CAD 9 million well costs there. So, that’s one thing that I’d highlight, and something that we’re really excited about.
Shant Madian: Thanks, Ryan. Couple more questions here on return of capital. I’ll probably break it up into two. One, someone is just looking for clarity, it looks like, our return to capital payout or questioning whether or not we increased it from 50% to 60%. So, if you we can give some clarity there first. And then the second question, someone is asking if we were looking at or would consider increasing that return in capital payout or perhaps accelerating buybacks and narrow the discount to that?
Ken Lamont: Sure, maybe I’ll take this one, Craig. It’s Ken. No, our framework hasn’t changed. Our total return of capital is really comprised of two parts. One of the base dividend and the other is a return of some discretionary excess cash. And really, the 60%, what we’ve done here is just simplified how we present it. We’re doing that now in aggregate return of capital as a percentage of excess cash, and that really now just makes us more comparable to our peers when you’re comparing our return of capital proposition relative to peers. So, I guess, that’s the first part, it has not changed. And obviously, we’re proud of this framework. We’ve been following it now for — or this is the fourth quarter. So, the second part of that is, no, we don’t have any plans to revisit the 60% return level.
I think this really strikes a healthy balance between a competitive return of capital, as well as allowing us some access to capital to reinvest in the business and to repay debt. So, no, we don’t have any plans to revisit the 60%.
Shant Madian: Another question around hedging, any plans to have more hedges in for 2024, and just someone asking particularly on why it dips in Q4, ’23.
Craig Bryksa: Ken, you’re probably best to speak to that as well.
