Taylor Reid: Yes, Derrick, were looking at our first capital activity that will operate on the new
asset in 2022. Theres actually a group of wells that were drilled and completed by QEP Diamondback earlier this year, the Disco pad. And theres additional locations that are permitted ready to drill on that location. So somewhere between
probably 6 to 8 wells that we would most likely drill and complete next year, so thatll be our first additional drilling activity.
From an
operation standpoint, we have closed, as you guys know, integrating the asset, really looking at applying some of the same practices that we apply on our assets. And I think well have the opportunity to drive some costs down on that front as
well.
Derrick Whitfield: Thats terrific, Taylor. Very helpful, guys. Thanks for your time.
Operator: Neal Dingmann, Truist Securities.
Neal Dingmann:
Maybe Michael, for you or Danny, my question, a little bit on what Derrick asked, and thats on consolidation. You talked about the shareholder return. And you guys did a [really] good job of kind of combining that mix, obviously notable
dividends and the shareholder return. Im just wondering how do you all see sort of tying that together with potential you mentioned obviously, Danny, the potential for consolidation. So if you see deals, Im just wondering how do
you sort of blend all those things together when you think about the shareholder return, as well as the consolidation?
Danny Brown: Yes, I think as we
think about it, Neal, I think were committed and weve, as weve indicated, to both returns on and return of capital. And so that return of piece is something thats really important to us, and weve hopefully,
weve been demonstrating that over time with the dividend. Its increased, the special we paid out and the share buyback program weve got. So were committed to continuing to do that, and well continue to evaluate
opportunities to do that.
As we move forward, I think its important that we also recognize industry consolidation is consolidation broadly
is something that needs to continue to happen. And we ought to be participants in that. And so I think as we see opportunities that are value-enhancing to shareholders, either by directly returning capital to them, or by doing accretive actions and
value-enhancing actions, that we think benefit shareholders, well look to take both of those approaches. And so I think well continue to be balanced from that standpoint, but the return of capital is a very, very key component of our
strategy.
Neal Dingmann: (Inaudible) comments. And then just one follow-up. Michael, you mentioned about the
service cost. Im just wondering what are you seeing already today that youve maybe incrementally then what you saw just on the end of 2Q. Im just wondering how much weve seen changes in kind of what you are thinking,
lets just say now into 2022?
Michael Lou: Yes, Neal, so from a service cost perspective, definitely seeing some pressure, and its not
universal, but across different segments. The good news is so far this year, weve been able to offset those service cost increases with efficiencies, both in frack operations, drilling operations, kind of across the board. As we look to really
we think we can maintain that through the end of the year. So as we look into 2022, really think youre going to start seeing more pressure thats going to show up kind of across the board.
Labor is definitely seeing it; trucking has been a bit of a challenge, but like I said, weve been able to offset that so far. I think youre going
to see increases as we get into 2022 and then likely through the end of the year.
Neal Dingmann: Great color. Thanks, gentlemen, thanks, guys.
Operator: Phillips Johnston, Capitol One .
Phillips Johnston:
Congrats. I was hoping you could address the plan for the 21 million units of Crestwood that you guys will own going forward. It seems like theres obviously some option value there, but is this an asset that we should expect you guys to
own over the long term, or would you like to either sell down those units over the next several quarters, or possibly distribute those units directly to Oasis shareholders via some sort of a dividend?
Michael Lou: Sure, Phillips, appreciate the comments, good question. So I think the way we think about the deal is a couple of things. One, we think this is
an incredible deal for really for all parties. So from a Crestwood perspective, build, size and scale, its an accretive deal; OMP kind of the same thing. Then from an Oasis perspective, weve been looking for ways to get kind of
that full read-through value, and we think this goes a long ways to do that. Well be deconsolidated, well have a much more kind of liquid, larger company kind of stock, lower position in that.