Ladies and gentlemen, thank you for standing by, and welcome to the Q2 2021 Bonanza Creek Energy earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star then one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then zero. I would now like to hand the conference over to your speaker for today, Scott Landreth. You may begin. Thank you. Good morning, everyone, and welcome to Bonanza Creek's second quarter 2021 earnings conference call and webcast. On the call this morning, I am joined by Eric Greager, President and CEO, Brant DeMuth, Executive Vice President and Chief Financial Officer, and other members of the senior management team. Yesterday, we issued our earnings press release, posted a new investor presentation, and filed our 10-Q with the SEC, all of which can be found on the investor relations section of our website. Some of the slides in the current investor presentation may be referenced during our remarks this morning. Please be aware that our remarks will include forward-looking statements that are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. You should read our full disclosures regarding forward-looking statements contained in our 10-Q, 10-K and other SEC filings. Also, during the call, we will refer to certain non-GAAP financial measures because we believe they are good metrics to use in evaluating performance. Reconciliations of these measures to the most directly comparable GAAP measure are contained in our earnings release and investor presentation. We will start the call with prepared remarks and then move to Q&A. As with previous earnings calls, we will take questions from those in the sell -side analyst community on today's call. I ask that investors and others with questions to please reach out to me directly to schedule a call. You can find my contact information on the investor relations section of our website or within yesterday's release. Now, I would like to turn the call over to Eric Greager, President and CEO. Eric? Thanks, Scott. Good morning, everyone, and thank you for joining us today. We appreciate your time and interest in Bonanza Creek. As with previous calls, we will keep our prepared remarks short in order to leave plenty of time for Q&A. It was a very busy second quarter for the company. We began the quarter with the announced closing of our merger with HighPoint Resources on April 1st and quickly followed that up with the announcement of two additional transactions, a merger of equals with Extraction Oil & Gas on May 10th, and the acquisition of Crestone Peak Resources on June 7th. Both transactions are subject to stockholder approval and customary closing conditions. Once Extraction and Crestone Peak are combined with Bonanza Creek to create Civitas Resources, it will become the largest pure-play DJ operator. Not to be lost in all the M&A activity during the quarter is a very positive second quarter for Bonanza Creek plus HighPoint. The integration of the two companies is proceeding well and ahead of schedule. Our second quarter production of 42.3 MBoe/d was flat to the pro forma first quarter and slightly better than the slight decline we had expected during our first quarter call. With our release yesterday, we raised our production guidance to a range of 41-44 MBoe/d, with 48%-52% coming from oil. We did elect to limit this and all other guidance to the third quarter, given the pending mergers. Our unit LOE, RMI OpEx, and recurring cash G&A expense all showed significant improvements from 1Q to 2Q due to the increased volumes associated with the HighPoint merger and from our focus on efficiencies and capturing synergies. When we first announced the HighPoint merger in November 2020, we promised $31 million in first-year synergies. I'm pleased to say that on an annualized basis, we have already captured well over $31 million in synergies, as shown on slide nine of the investor presentation we posted yesterday. I'm proud of the work done across the organization to effectively integrate HighPoint into Bonanza Creek. It reinforces my confidence in our ability to successfully integrate Extraction and Crestone Peak and continue to deliver synergy value to shareholders. We have lowered our LOE guidance to a range of $2.85-$3 per BOE and established recurring cash G&A guidance of $8 million-$9.5 million for 3Q. Guidance for RMI OpEx and severance and ad valorem taxes were unchanged, except for limiting the guidance to 3Q. CapEx for the quarter was just under $41 million, which brings year-to-date CapEx to approximately $74 million. We still believe an annual CapEx range of $150 million-$170 million is appropriate for full year of standalone BCEI but we have provided 3Q guidance of $55 million-$65 million. Finally, one last item related to 3Q guidance. Given the current strip for WTI, which is above $55/bbl, where our oil differential begins to escalate, we estimate our oil differential to be in the $6.50-$7.00/bbl range for the third quarter. Bonanza Creek paid its first-ever quarterly dividend of $0.35 per share in June. The annual dividend of $1.40 per share represents approximately 3.7% dividend yield at the current share price. The Bonanza Creek board of directors declared that the third quarter 2021 fixed dividend of $0.35 per share will be paid on September 30th to shareholders of record at the close of business on September 15th. Civitas has committed to returning capital to shareholders through increased dividends, and as previously announced, we anticipate that the annual dividend will be increased to $1.85, approximately $0.46 per share per quarter at closing of the pending transactions with Extraction and Crestone Peak. In the earnings release, we provided certain 2Q metrics for the individual companies forming Civitas. The three companies produced a total of 162.3 MBoe/d during the second quarter. Bonanza contributed 42.3 MBoe/d of those volumes. Extraction contributed 76.6 MBoe/d, and Crestone Peak contributed 43.4 MBoe/d. We will provide additional information on the merger transactions as we progress toward closing in early Q4. With that, I will return the call to the operator for Q&A. Thank you. Ladies and gentlemen, as a reminder, to ask the question, you will need to press star then one on your telephone. To withdraw your question, press the pound key. Again, that's star one to ask the question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Leo Mariani with KeyBanc. Your line is open. Hey, guys. Wanted to see if we could get a little bit more color on what you guys are sort of working on in terms of integrating all three companies. I obviously know there has to be a vote and whatnot, and you guys have to close these deals, but you certainly put some language in the press release that you guys are kind of working fast and furiously on this. I know you originally had a $70 million synergy target. Clearly on HPR, it looks like you've seeded that $31 million target and did it, I guess, faster than expected. Is there just kind of any update to your thoughts on the ability and amount of synergies on these deals? Thanks. Good morning, Leo. What I would say is, as you'd expect, it's not complicated, it's not complex, but it takes a great deal of time and energy, and we're interviewing all the employees of the three companies that are coming together. As we continue to have conversations and evaluate what will become the Civitas organizational structure, there are necessary changes that need to be made. This will be a new company entirely. There's just a lot of work that has to be done in terms of getting to know folks, in terms of evaluating the strengths and talents of each individual, and a lot of decisions that have to be made in terms of how we're going to arrange the structure itself. I would say that that's the biggest part of what is ongoing today, is the effort around organizational structure. I think much of the decision making around rationalizing our downtown office space has been done. I'm happy to talk a little bit more about that. Much of the decision making around rationalizing office space and yards in the field has been done. Obviously, we haven't realized the savings, but I think we've got pretty good plans in place. Again, it's just a great deal of work, but having accomplished the HighPoint synergy savings ahead of schedule, and the cultural integration ahead of schedule as well, I've got a great deal of confidence in our team's ability to both put this together quickly and execute the close and transition swiftly and without any excess friction. Let me stop there, Leo, and see if you've got a follow-up question specifically around what I mentioned. No, I think that was pretty thorough, Eric. Sounds like you guys are working fast and furiously. Obviously I don't want to put the cart before the horse. I know you have to get these deals under your belt, just how are you feeling about other potential opportunities in the DJ to maybe roll up other assets or other companies? Is that something that Civitas will start looking at immediately kind of after close or perhaps even before? Maybe there are some targets that you guys already have your sort of focus on at this point. Yeah, we continue to be focused on value creation and discipline, Leo, but we haven't stopped looking. We've basically carried straight through with our core analysis team and core analysis tools and continuing to have the work that happens behind the scenes, all the analysis that needs to be done. Obviously, we can't do anything, and we can't have any value conversations with anyone during the pendency of these transactions. We wouldn't think to do something like that. Continuing on with analysis, particularly technical analysis, is core to our business. It's exactly what you would expect any business like ours to continue doing, even in the pendency of a transaction, technical and operating analysis as to how to drive value in our strategy. Specifically, I would say that we're going to continue to create value for shareholders. If you look at our trading multiple today, Civitas on an EBITDA basis for 2022, it does make things a little bit more challenging, and we're going to remain disciplined. I would say that here in front of everyone, that because we're a disciplined value-creating organization, we're not going to pay through our multiple, and that means things get a little bit more challenging when the multiple's depressed or compressed. That's a fact, and it doesn't come as a surprise to anyone on the call. We will continue running the analysis and executing our strategy, and we'll take it from there. Beyond that, I don't know much more that I can say, but feel free to follow up with a specific and I'll try to answer. No, that was a very helpful color, for sure. Just lastly for you guys here, could you speak a little bit to the kind of current permitting situation out there in the DJ? I know obviously you guys, I'm sure, can give a robust answer on the Bonanza Creek side, but do you have any insight potentially onto how things might be going on maybe some of the Crestone or the XOG lands that are a little bit more of a slightly more urban type environment and less rural than legacy Bonanza? Yeah. We've submitted dozens of OGDP applications, and those are all outstanding. We feel like the regulatory environment is growing more and more constructive. We haven't received any approvals, but we're very confident in the fact that we will. Confident in the fact that many of these have already cleared completeness, and we've got very open channels to the regulators and to the municipalities. We've got great relationships all along the Western corridor through the Crestone Peak and Extraction community relations team, government relations teams, and regulatory teams. Then moving further south, we feel confident in our relationship in and around the Watkins asset base, that we'll continue to be able to generate permits going forward. The combined company has 300 permits approved right now in inventory. That'll take us well out into 2022 and beyond. That excludes Hereford and Grover. If you included those stellar assets to the north, then we'd have even more permits. We generally exclude Grover and Hereford from that list. Let me stop there, Leo, and see if you want to follow up on any of that. No, I think that was, again, very thorough for sure, and I appreciate your time. Thanks, Leo. Thank you. Our next question comes from the line of Neal Dingmann with Truist Securities. Your line is open. Good morning, Eric. My first question is, I guess what I'd say the top of the agenda these days, I'm just wondering, going forward, what's your preferences for incremental shareholder return? I ask especially considering the notable quarterly dividend you all are already paying. Hey, Neal. It is a core tenet of BCEI and more importantly going forward, Civitas, to return cash to shareholders. The $1.85 a share on announcement of the second of the two announced transactions is a pretty strong base dividend. What I would say is we continue to remain focused on returning cash. The other thing I would suggest is the Civitas board, while we've had lots of conversations with the board, has not yet formed. As a consequence of that, has not had the opportunity to take up in full kind of formal policy, expanded capital allocation practices and policies. Once we get a little closer to close, I anticipate that we'll have more to say about that. We're absolutely committed to returning cash to shareholders, and I think every tool in the toolbox should be made available to us as we move over commodity cycles and through various phases of the business development. Very good. Nice to hear. O bviously, the quarterly dividend today is very nice. Secondly, just my third question is on anticipated well spacing on slide 8. It appears you all are sort of on the wider side, though it sounds like you may have submitted some plans to Broomfield for a bit tighter well spacing. I'm just wondering how you're thinking about average spacing going forward. Yeah. The way we think about spacing and stacking, Neal, is we'll adjust along the way. It's price dependent. When the prices are high and the resource can support it, then we'll maximize the returns of the capital invested in the rock. In some cases where the rock is better, more well-developed in terms of geology, porosity, and permeability and pressure, it'll sustain more wells per section. We aim to maximize returns. Think cash-on-cash return or maximizing a PIR/I metric. That's the way we think about. When prices are high, that means we're going to be able to down space just a little bit, and when prices weaken a bit, we'll up space. We think about that relationship not just in spacing and stacking where you have multiple horizons like the Codell, but we also think about stimulation design the same way. If you run out these options as you apply the permits and then develop the pad, set surfaces, drill out production intervals and start stimulations, you've got staggering options along the way that allow you the opportunity to maximize the economic return of the incremental capital invested. What we're shooting for is maximizing the return and spacing and stacking and stimulation design will be dependent on that in much the same way that production will be dependent on notionally half our EBITDA generated. We like to think about this rather than the old school thinking about setting a particular stimulation design or a particular spacing and stacking regimen independent of price. We like to think about things like reinvestment rate as an independent variable and things like production as dependent variables in the same way that we think about commodity price in particular as the independent variable and spacing, stacking, and stimulation design as a dependent variable maximizing an economic metric like cash on cash return or PIR/I. Love to hear it. I think those economics and that optionality makes a lot of sense. Thank you. Thank you, Neal. Thank you. Our next question comes from the line of Mike Scialla with Stifel. Your line is open. Yeah, good morning. Eric, your LOE came in a little bit better than we were expecting, I guess below your guidance, and then you lowered your guidance for third quarter. Wanted to see if there was anything in particular there that drove that and what you're thinking in terms of how sustainable that might be as you look into the fourth quarter after these mergers close. Morning, Mike. Thank you. Yeah, if I were to sum it up briefly, I would say many of the connections, including produced water connections and other LOE and direct OpEx related items, just came in ahead of schedule in terms of connecting the HighPoint systems to the BCEI systems, rationalizing things like routes and other items that tend to drive LOE on a unit basis. All of that is moving ahead of schedule, and it allowed us to take down Q2 and also take down Q3 below expectations. I anticipate that's only going to get better as we move through close and build out Civitas. There are just a great deal of operational synergies. When you think about BCEI and HighPoint, clearly the industrial logic made a great deal of sense. When we announced the Extraction, one of the things we pointed to is the downtown office space, there's a bit of redundancy in terms of square footage and G&A more broadly. In the field, there was a little less overlap, but when you layer on Crestone Peak onto XOG, it creates a similar dynamic between those two companies that existed within BCEI and HighPoint. We just expect these direct OpEx numbers and cash cost structure across the board to get meaningfully better over time as we grow our efficiencies and scale and capture these synergy savings. Okay, good. Looked like the merger-related costs for the HighPoint deal were a little bit higher than we had anticipated. Wanted to see if were all those merger-related costs relative to HighPoint for the quarter, or was some of the Extraction and Crestone Peak in there as well? Any thoughts about what those might look like in the fourth quarter for finishing up the Extraction and Crestone Peak transactions? Yeah. It's a good question. It's difficult to untangle perfectly and completely transaction-related costs from run rate costs. We've done our best, and you can see the two categories separated. When we announced Extraction and Crestone Peak, we clearly were in the throes of the integration work and a lot of the transaction costs carrying through. As the parent and the issuer, these costs will carry through on the BCEI accounts going forward. I would imagine that we'll continue to see merger-related costs, transaction costs running through Q4 and probably bleeding into Q1 as well. Generally speaking, Q2 had not just, the tail end of the HighPoint merger-related transaction costs, but also Extraction and Crestone Peak starting to ramp up at that time, because we really didn't stand down any of that merger and transaction apparatus including all the various advisors on all sides of the business, legal, banking, and all the rest, audit. Hey, Mike, it's Brant. If you circle up $3 million- $5 million in the second quarter, that would be associated with what we've been doing beyond HighPoint. Okay, that's helpful. It sounds like there's a fair bit in there beyond HighPoint and maybe a little bit less in fourth quarter. Would that be your best guess at this point? Obviously, fairness opinions get paid up front. That was a large chunk of it. Yeah. A lot of the legal work is done on the front end as well because you're paying that as you go. A lot of that's associated with both merger agreements and then importantly, the S-4 filings. Okay. Last one from me, just now that we're closer to the mergers, any thoughts? I know it's still early for looking at 2022. You guys have told us what Extraction and Crestone Peak, giving us a look at their EBITDA and the production for the quarter. I guess as you look into next year, should we assume you're going to try and hold things flat? Any idea in terms of activity levels of what you might be looking at to accomplish that? Yeah, it's still pretty early. I'm going to stick with, Mike, what we've said already, which is notionally 50% of our EBITDA generated reinvested. We think that'll run right now, given the quality of assets, notionally flat production, running three operated rigs on a pretty much a level-loaded basis and three level-loaded frac crews moving around this DJ acreage position. I think generally speaking, that still feels pretty good. I would emphasize, our thinking is this whole input is reinvestment rate, output is production. Just like I discussed earlier in Neal's question around spacing. Some things are dependent on others, and we're not being dogmatic about holding production. We do expect it to hold flat, but we're not dogmatic about that. We're going to let that be what it is as we manage reinvestment rates. We think that's the most sensible model to build. Great. Thanks, guys. Appreciate the time. Thanks, Mike. You bet. Thank you. Our next question comes from the line of Phillips Johnston with Capital One. Your line is open. Hey, guys. Thank you. Just to follow up on Neal's question on cash return. If we assume a low-case scenario of $45 oil, $250 gas, held flat forever, your pro forma leverage ratio still stays below 0.5x indefinitely, and your pro forma free cash flow yield would still be in the 6%-9% range over the next five years based on the current share price. That suggests, obviously, you guys could either raise the pro forma above 85% base dividend pretty significantly or start paying variables or buy back a significant amount of stock or some sort of a combination of those options. Eric, I know you said all of the options are on the table, and obviously the board needs to hammer things out, but can you maybe talk about what options you guys might be leaning towards and what some of the advantages and drawbacks that you guys see regarding buybacks versus variables? Yeah, it's a great question, Phillips. I don't want to front run the board, but what I can tell you is we recognize that when our trading multiples are compressed the way they are today, that our shares are a bargain. We also recognize that in terms of opportunities to allocate capital, that buying back our own shares may, in fact, be one of the most compelling uses of free cash flow. No one on this call would be surprised by that statement. It's purely a matter of how you allocate capital to the highest returning opportunities. If we can buy our own shares back at such a discount, why wouldn't we consider doing so? I put that out there. Juxtaposed to that is the historical performance of this industry in terms of how ineffective we've been at timing share repurchases in terms of the cycle. We want to be counter-cyclic as much as we can. We'd really want to be buying our shares back when they're down in the depths of, say, 2020 lows as opposed to today. Again, you don't always have that opportunity. I really like the dividend. I think it's strong, but I think the board will also consider some sort of special or variable construct. I say that only because it does give you some flexibility to use your post-dividend free cash flow generated for purposes. What else are you going to use it for? It's either return cash to shareholders, vis-a-vis one of these couple of tools, or to pay down debt. Since our debt is already pretty low on a leverage ratio basis, one might argue we're over-equitized, and it wouldn't make sense to run our debt any lower. To optimize our capital structure, we might leave it where it is and find other ways to return cash to shareholders. All of that remains to be really hammered out by the Civitas board. I don't think I've said anything controversial because this is pretty fundamental capital allocation strategy. I do think it's really important for us to consider share repurchases, particularly when our market price is substantially below our intrinsic value. That's just built-in savings, and why not buy yourself back at a discount? Yeah, I appreciate the very thorough answer, I would agree with pretty much everything you said. In terms of guidance, obviously we have a pretty good picture of Q3, and obviously you haven't given anything on Q4, just given the uncertainty on when the deal's closed. I guess for those of us that assume an October 1st close, just for modeling purposes, should we just add up the three entities' second quarter volumes and assume the fourth quarter will look fairly similar? Are there some moving parts there that would maybe put Q4 a little bit higher or lower than that sort of second quarter run rate? I think that's actually pretty good, Phillips. You'd want to season in starting to capture synergy savings, starting from the moment of close moving forward. I think if I were doing it today, I'd take the three separate models built up, and I'd push them together, and I'd run them out. What we anticipate is providing a fourth-quarter stub period guidance shortly after close, and then probably not too long after that, sometime in Q4, providing a more comprehensive 2022 guidance. We want to get after it pretty quickly. If I were you, I'd do it exactly like you suggested, and then sprinkle in some synergy savings throughout Q4. Phillips, this is Brant. That's perfect. I would just caution that what's in the 10-Q is not meant to be a pro forma. Yeah. It's a sum of the parts. Yeah. Okay. Just to clarify on the rig count. If I'm not mistaken, out of the three companies, Crestone is really the only one running a rig today. You guys mentioned adding a rig in Q4. On a pro forma basis, would that be going to a two-rig program? Am I not thinking about that correctly? No, I think you're thinking about it correctly. I think it's entirely likely that Crestone Peak will continue running their rig. It's entirely likely that both XOG and BCEI will pick up a rig. It'll probably be fractions. You wouldn't want to carry one full rig for the full quarter for each, because it's likely to be picking up rigs throughout the quarter for each of the three companies. That's what I expect. Of course, BCEI right now is running two frac crews. You'll want to think about that as well. XOG's not running a frac crew, and Crestone Peak will be picking up a frac crew in the not-too-distant future. I think shortly after close, we'll begin approaching that activity pace fairly quickly. Within a couple of weeks after close, you'll see us start picking up rigs and getting after that pace. Okay. Maybe like a three-rig program between the three companies by the end of this year kind of thing? I think so. Yeah. Okay. Perfect. Thank you, Eric. Thanks, Phillips. Thank you. Our next question comes from the line of Nicholas Pope with Seaport. Your line is open. Morning, team. Hey, Nick. Kind of following up on that rig question. When this rig comes in on your assets, it's going to be like a year and a half since you all last had a rig actively drilling. Can you talk a little bit about maybe what goes into the company restarting that drilling program, and maybe where costs are relative to where we were when we last left the drilling rig in 2020? Just to help with that production modeling. Sure. I anticipate on the BCEI standalone basis, we'll be running in the, I'm going to call it $500, maybe $520 per linear foot of lateral or per lateral foot. That's a combination of XRLs and SRLs. That's on BCEI standalone. We acquired, at the bottom of the market, a bunch of oil country tubular goods, particularly the hardening grade alloys, the HC-P110 for 5.5 production casing. We bought that at the bottom of the market, that'll carry us through our startup. Of course, XOG and Crestone Peak also continued with their D&C paced development. For us in particular, we're pretty confident. All of our engineers are utility players. Right through Dean and I, Dean's sitting here at the table, Dean and I are D&C guys ourselves, we've maintained our utility players through the operations organization. We really haven't given up any of the capabilities. Even though we did have a reduction in force back in April of 2020, we've maintained all of our D&C capabilities along the way, and we bought some supplies at the bottom of the market. I feel really good about our ability to pick up a rig and start right where we left off. I think XOG and Crestone Peak, particularly Crestone Peak, has maintained their drilling activity. They're sort of fight trim right now. I'm very confident that XOG's team can pick it right up for all the same reasons that we, BCEI, are confident in ourselves. Got it. That makes sense. Just going back a little bit. Is there any update on where activity is on the French Lake asset? Yeah. No, that's a great question. Oxy continues to work with Mr. Cervi out at French Lake. We feel pretty good about the progress we've been making. It is progress in incremental bites. What I mean by that is, through COVID, there were very restricted access to folks just because of the slow pace of recovery. As we moved into 4Q and then into 2021, we began discussing with the surface owners out at French Lake moving forward. It's just been slow, and we continue to make incremental progress. I don't have anything new to report in terms of massive shifts forward in development. We've got a surface use agreement done and ready to be executed, and we continue to meet with Mr. Cervi and his representatives as we have those conversations and hammer out small details and continue to work forward. It's a good relationship, both with us and the operator, Oxy, and also with the owners. There's just a lot of details that need to be worked out. We're making progress on it. That's great. Then one last thing. There's a comment in there about the Crestone Peak side. There's a $750 million of debt cancellation. I just want to make sure I understand that correctly. Is that all taken care of with the deal metrics, and it's really not associated with Bonanza Creek and Civitas going forward? It will be eliminated at or before closing. I've got Sandi here with me, and she's our Chief Accounting Officer here at BCEI and understands the details certainly better than I do. I think because of the way Crestone Peak ownership is structured, and they're private, it is an elimination that happens en route to close and will not carry through to Civitas on a combination basis. All right. Well, I think I took all my questions. Thank you. Thanks, Nick. Have a great morning. Thank you. As a reminder, ladies and gentlemen, that is star 1 to ask the question. Our next question comes from the line of Noel Parks with Tuohy Brothers. Your line is open. Hey, good morning. Noel, how are you? Real good, thanks. How about you? We're doing well. Thank you. Good. I was intrigued to sort of hear your discussion a little earlier about viewing frac design in terms of economic conditions. The first thing that came to mind when you were talking about that was, is that a separate discussion from just a general plan of managing your DUC inventory to sort of take advantage of either favorable service costs or near-term pricing as opposed to using it to just sort of judiciously bring cash on board at a good time for either the budget or for commodity prices versus the outlay of cash for completions? I'm going to say it's all of those things, Noel. What's built into that approach is essentially it starts at the very front end of building out a development plan. Of course, these development plans are built out to the end of life of the assets. Today, we will look at a development plan for Civitas that is built out to the end of life. We call it a depletion plan. It runs all the way out to the last well, to the last acre, to the last dollar of land developed. You prioritize that, bringing forward your best economics to the front. Buried within that is our physics engine, which runs behind all of these decisions. You've heard me talk about Dynamo, and Dynamo is our core economic development optimization engine. It's this special IP we've created at BCEI. No matter where within the basin or where along the creaming curve we invest capital, we can drop a crosshair on that acreage, and Dynamo will generate an optimized type curve and will back calculate based on current commodity price and based on current capital factor input. It costs, right? You have a cost model that's current, and you have a revenue model that's current. Dynamo will optimize the economic returns on those dollars invested. That will back calculate both the spacing, stacking, and stimulation design. Then as we work our way forward through that development plan, we set up meetings with municipalities and with COGCC and with others as we prepare DSUs and we set these units up. We tend to permit at higher density, meaning more surfaces per pad than might ultimately be necessary because you want to maintain the option in the event that price rips. Again, maximizing the return might require more wells per section. If price retreats, Dynamo will predict fewer wells per section, and we can run out options along the way, meaning you spud fewer wells if you have all the slots approved. Even if you've spudded and set surface, you don't have to drill out all those surfaces if prices don't support it. You can drill out just the production intervals necessary. Even after you've TD'd, cased, and cemented the well bores, you still have an opportunity to both lean into higher intensity and larger stimulation designs or back off the stimulation intensity as necessary while you're zipping the wells together. Think of this like a series of options that you exercise as you move down the road, getting ultimately to the very last stimulation, the very last stage, and the very last well, and the very last heel, when you've effectively run out those opportunities. You still have artificial lift designs. You still have reservoir pressure management vis-a-vis choke and pressure management regimes to maximize your return. The way we think about this is all driven by running those options out as long as possible and making every incremental $1 investment on a maximum returns basis, based on which option we're playing at that very moment. Great. I'm just curious, is what Bonanza Creek was doing with Dynamo a more granular analysis than either Crestone or Extraction themselves have been doing in house? Yeah, it's different in general and in principle. We're bringing these three companies together because of the relative strengths of the companies. You've got, particularly along the west side of the basin, very strong assets. The Niobrara in all of its horizons, plus the Codell, are much better developed along the western flank of the basin, right along the synclinal axis. It's the highest quality reservoir. It's deeper, it's hotter, it's higher pressure, and it's better developed both in thickness and in petrophysical terms. You've got higher quality assets along the west. Crestone Peak and XOG bring those higher quality assets. They also bring great people, great teams in terms of community government relations, and ESG. We've inherited strong capabilities, practices from those two teams. Because we were operating, we, BCEI and HighPoint, were operating along the eastern flank in a more rural area, we didn't have to build those muscles nearly as much as the folks operating along the western corridor. We bring those strengths into the Civitas organization, and now we've got all those operating practices and capabilities, plus access to better resources along the western flank, just in terms of better developed rock. That, when you add all of the undeveloped upside to the south in Watkins and the quality of that resource, we think we're bringing the very best of the best companies together. It's a lean, talent-driven organization, strong in technical and operational capability. What I would say specifically around Dynamo is that's unique to BCEI, but I don't think running out the options was necessarily something that was unique in our development planning. I can tell you, I am impressed by working together with these two teams, through dependency of the transactions, at how sophisticated each company is in different ways. Bringing all that together is just a real strength in this consolidation. Terrific. Just the last one from me, just a bit of housekeeping. In the quarter, the midstream operating expense came in a good bit lower than I had expected. I was just wondering if you could talk about the drivers of that. I'm just wondering if that is potentially more of a one-time effect and we might see it go up from here. Yeah, Noel, I'm going to attempt to answer that right now, and I've got Scott and Sandy and Dean here as well, who will think about it while I'm working. I think it's RMI OpEx you're talking about. Remember, when we pulled together HighPoint and BCEI, HighPoint didn't really have the equivalent of an RMI. That is a wholly owned set of accounts, a wholly owned gathering and compression operation in a set of accounts. They booked a lot of the gathering and compression charges to LOE. When we brought BCEI and HighPoint together, you'll recall, and you can actually look back through the last couple of quarters and you'll see this, LOE went up on a unit basis, and the reason for that was because HighPoint brought over incremental gathering and compression charges that were booked to LOE. Now, we're starting to manage that down and we're taking advantage of synergies and efficiencies. One of the necessary or natural benefits of that was because they didn't have those gathering and compression accounts booked to an RMI-like entity, then RMI got the benefit of all the dilution of the BOEs in the denominator, and it took the unit cost down on an RMI OpEx basis, but LOE went up. If you look quarter-over-quarter, before and since, I think if you add those two together and you call them direct OpEx, it's going to be in line with expectations or what you'd expect. Meaning, you sum the two together, the two parts are going to look different from one another before and after the transaction. When you put them together, it'll make sense, and the combination on a unit basis will continue to come down over time as we manage efficiencies and synergies. Does that answer the question on RMI specifically or the midstream OpEx? It does. Thanks a lot. Thank you, Noel. Thank you. Our next question comes from the line of Ray Deacon with PetroLotus. Your line is open. Yeah. Hey, good morning, Eric and Brant. Hey, good morning. Ray. I had a question. I recall, a couple of quarters back when you announced the Extraction deal, you talked about the economics being the strongest on the western side of the basin. I noticed in August the gas prices are over $4. I was just wondering if you could talk about what the returns look like at the moment. In short, Ray, they're strong. Those wells, because it's a really well-developed resource. It's deeper, yes. It's higher pressure, yes. Boy, are those strong wells. Because gas is worth something these days, and NGL is worth something these days, all that thermal maturity and gas energy brings a lot of oil with it, which is worth something today, too. These are big curves. These are million BOE type curves. Some of these are 15,000, even longer in some cases, lateral lengths, which are going to make those type curves even larger. The economics, on an IRR basis, are going to be north of 100% at anything that resembles today's strip. You can see that actually in our latest rollout material or our launch deck, where we created the skyline or the creaming curve. You notice we truncated all of that inventory on the left side of that curve. It's all truncated at 100% because it gets well north of that. We didn't want to create the scale that went too far because we wanted it to all make sense. That's on slide 15 of our last rollout deck, the one that featured Civitas plus Crestone Peak. Right. Great. Just one last one. The widening of the basis to $6.75 on the crude side in 3Q, is there a chance that that reverses, and what are the drivers of that? You'll notice that was marked on a $7.30 strip, which we noted, I think, in our investor deck. Since then, the strip has come down a little bit, and actually, because this is a function of strip pricing as well as an escalator, as well as some of the White Cliffs deducts and other kind of market basis around here. It's going to move around. We think generally speaking, it's in the right range, but actually, the midpoint of $6.75 implied by that range is a little higher than the way we would see it today if prices stayed where they are today. We just wanted to be clear with everyone that not only do we have this TI escalator on our oil gathering and sales contract, but that White Cliffs basis has expanded just a little bit as well. Got it. Great. Thank you. Thank you. I'm showing no further questions in the queue. I would now like to turn the call back over to Eric for closing remarks. Tawanda, thank you. I just wanted to thank everyone for joining us on the call today, and I wanted to point out that we'll be at EnerCom coming up in just a week or two. Happy to sit down with folks then, and we'll have the extended Civitas team with us at the time, so we'll be able to go into a little bit more detail then. Thank you, everyone. Have a good day. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.