While I’m here, let me just talk a second about the flexibility we have in our capital structure. I noted in my prepared comments, we have $200 million of high coupon legacy USX debt that’s going to be — it’s like 8.5% to 9% coupon. So it’d be really nice to get that out of the system. It’s not a big quantum, so we’re just going to pay that off of cash on hand. Aside from that, and the acquisition term loan that I already referenced, the only other maturities we have between now and 2027 are in aggregate $1 billion in tax exempt bonds that mature somewhat ratably over ’23, ’24 and ’26. And under that tax exempt bond arrangement, we can refinance fees, as they come due in any tenor all the way out to 2037. So a ton of flexibility there. They’re very interest rate advantaged to taxable debt.
Even in this crazy interest rate environment, they’re quite a bit advantaged and the things normalize as we go forward here a little bit from an interest rate perspective, they’re — the coupon on this one we’re retiring now is 2%, and that’s kind of companies. So we really like that flexibility. And the last thing I’ll say is we extended recently our $2.5 billion credit facility out to July of 2027. So kind of flexibility there. Bottom line, shareholder returns first, pay back debt second. We have capacity to do both. I’m not going to give you a break line formula how we’re thinking about it. But that’s our commitment. And that’s how we’re going to proceed.
Jeanine Wai: Great. Thank you, gentlemen.
Operator: Next question comes from Neal Dingmann, Truist Securities. Please go ahead.
Neal Dingmann: I’ll leave my first question for you or Dane, on capital allocation, specifically. I definitely appreciate and really support the buyback focus. I’m just curious, have you all changed the way you think about your stock dividend or your stock valuation as the savers the dividend payout. Just wondering, I mean, you all think about some mid-cycle prices used when looking at the metrics? Or is there any other details you were taking to provide on kind of how you’re looking at the buyback versus the disk?
Michael Henderson: Yes. Go ahead, Dane.
Dane Whitehead: Neal, yes. So from a base dividend perspective, we want that to be competitive and sustainable. And sustainability is kind of the governor there. We look at sort of conservative mid-cycle pricing, maybe a $50 WTI world and trend not get too far of, say, 10% of operating cash flow on that base dividend. And so that’s a bit of a governor. Now we have the synergy with the share repurchases that surprisingly — is surprising how quickly you can buy back enough stock to pay for another 10% increase, and we’ll definitely be in that window again sometime this year. So that’s how we think about the dividend, share repurchases, obviously, organic lion’s share of our return of capital program, and I would expect that to continue as long as our free cash flow yield is indicative of a really efficient way to buy back stock.
Lee Tillman: Yes. I think, Neal, if you look at the aggregate efficiency of our share repurchase program, it really has been a differentiating, I think, feature for us since we started that program back in October of ’21. I mean to be talking about a 20% — over 20% reduction in shares outstanding and the dramatic impact that, that has on per share metrics it’s pretty notable. And as Dane noted, not only is that a very efficient mechanism for getting that cash back to shareholders. But the synergy effect that it has with the base dividend is also pretty remarkable. So that — those mechanisms, we believe, are still the case to be as we look ahead into 2023.
