Battalion Oil Corporation

Welcome to the Battalion Oil Third Quarter 2021 Earnings Call. As a reminder, today's conference is being recorded. Now I'll turn it over to Manager of Finance, Chris Lang. You may begin.

Good morning. I'm joined by a few of my colleagues today that I'd like to introduce. Battalion's Chief Executive Officer, Richard Little, our Chief Financial Officer, Kevin Andrews, and our Chief Operating Officer, Daniel Rowling. This conference call contains forward-looking statements. For a detailed description of our disclaimer, see our earnings release issued yesterday and posted on our website. This conference call also includes references to certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable measure under GAAP are contained in our earnings release announcement released yesterday. We have also published an investor presentation, which may be found on our website and will be referenced during this webcast. Now, our team will present a few scripted remarks, followed by Q&A. And with that, I'd like to turn it over to Rich to start things off. Rich?

Good morning, and thank you for joining us this morning. We are excited to share with you the results from our third quarter, which has been our best quarter this year. During the first half of 2021, we put significant effort into high grading our central processing facility at Monument Draw. That was to allow for improved flow assurance and reduced downtime across the field. Our results this quarter put that on display. Despite completing our capital program in the second quarter, our total daily production increased 14% quarter over quarter, due in large part to our facility upgrades at Monument Draw and reduced well downtime. Our operations team has been relentlessly focused on efficiently and cost-effectively repairing, maintaining, and working over our field and facilities this year. And we're hopeful this success serves as a springboard for us as we move through the fourth quarter and into 2022. The robust production was well-timed as it allowed us to really take advantage of an improving commodity price environment. The increased production, together with an increased gas and NGL price in the second half of this year, provided a boost to our bottom line as we recorded adjusted EBITDA of approximately $23 million in the third quarter. That's a 63% increase over the second quarter. This increase in cash flow allowed us to accelerate our deleveraging, pulling our net leverage ratio down to 2.5 times at quarter end. With a strong third quarter behind us, we pivot to the fourth quarter with a clear focus. Continue optimizing our operations as we prepare to return to development on our Monument Draw asset. On the production front, we remain diligent in our efforts to improve flow assurance and manage operating expenses despite a rising service cost environment. On the development side, as we work to finalize our 2022 capital program, we're taking important steps to mitigate cost increases. by advanced purchasing materials and protecting our cash flows through increased hedging activity. One final note, as we touch on 2022, we recently entered into a rig contract and expect to spot our next well in December of this year, as we aim to get a jump on our 2022 program. As such, we are increasing our 2021 CapEx guidance range to 45 to 55 million. Now I'll pass it off to Kevin to walk through our financial results.