Evolution Petroleum Corporation, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Evolution Petroleum Fiscal Year End 2022 Earnings Release Conference Call. At this time, all participants are on a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. I would now like to turn the call over to Chief Financial Officer Ryan Stash. Please go ahead.

Thank you, and good afternoon, everyone. Welcome to our earnings call for the fourth quarter and full year fiscal 2022. I am Ryan Stash, Chief Financial Officer. Joining me today is Kelly Lloyd, Interim President and Chief Executive Officer and a member of our Board of Directors. After I cover the forward-looking statements, Kelly will review key highlights along with operational results. I will then return to provide a more detailed financial review, and then Kelly will provide some closing comments before we open it up and take your questions. Please note that any statements and information provided today are time-sensitive and may not be accurate at a later date. Our discussion today will contain forward-looking statements of management's beliefs and assumptions based on currently available information. These forward-looking statements are subject to risk and uncertainties that are listed and described in our filings with the SEC. Actual results may differ materially from those expected. As detailed numbers are readily available to everyone in yesterday's earnings release, This call will primarily focus on our strategy, as well as key operational and financial results, and how these affect us moving forward. Please note that this conference call is being recorded. If you wish to listen to a replay of today's call, it will be available by going to the company's website or via recorded replay until December 13, 2022. With that, I will turn the call over to Kelly.

Thank you, Ryan. Good afternoon, everyone, and thanks for joining us for today's call. The fourth quarter marked a strong end to an exceptional fiscal 2022, and I want to thank our workforce for their continued dedication and hard work that drove the company's many accomplishments. During the 12 months ended June 30, 2022, we posted material year-over-year increases across the board, including production growth of 145%, revenue that was 233% higher, an increase of 550% in adjusted EBITDA, and approved reserves that were 55% higher than year-end fiscal 21, including replacing more than 550% of fiscal 22 production. We are focused on maximizing total shareholder return and optimizing every dollar that we invest. As such, we used the significant cash flow generated by our enhanced asset base to fund our development and operational needs, maintain our strong balance sheet through a rapid reduction of debt, and pay almost $12 million in cash dividends to shareholders during the year. We are proud that our consistent and longstanding program has returned approximately $86 million, or $2.61 per common share, of capital since December 2013. We have strong, long-life, and low-decline assets that will continue to support a substantive quarterly dividend for the immediate and long-term, benefiting our shareholders with a steady return of capital. A key highlight of the fourth quarter was the April 1st closing of our acquisition of natural gas weighted assets in the Jonah Field, located in Sublette County, Wyoming, that added 42.8 BCFE approved reserve inventory. We also saw a full quarter of operational and financial benefit from our purchase of oil weighted assets in the Williston Basin in North Dakota that closed on January 14th. The cash flow from these acquisitions has exceeded our expectations that were in place at the time of purchase. We look forward to working closely with the operators in both locations as they effectively develop the assets and leverage operational best practices to further support the long-term sustainability of our collective businesses. These two immediately accretive transactions follow our proven acquisition playbook executed during fiscal years 2020 and 2021, with the overall combination providing enhanced diversification of our product mix and reserve categories across an expanded geographic footprint in multiple key U.S. onshore plays. Most important, our enhanced asset base provides for significant cash flow generation that further supports our well-established shareholder capital return program, provides a visible source of funding for future targeted strategic growth opportunities, and places us in a strong position as we move into fiscal 2023 and beyond. During the fourth quarter, we produced 7,451 net BOE per day. which was 34% higher than the 5,578 net BOE per day that we produced in the third quarter. During fiscal 2022, we benefited from higher commodity pricing, and the fourth quarter was no exception. The combination of increased production and pricing, as well as prudent cost management for expenses that we can control, resulted in fourth quarter adjusted EBITDA of $21.7 million. a 76% increase from the third quarter. We generated significant operating cash flow during the fourth quarter, of which we used almost $16 million to pay down debt following the closing of the Jonah Field acquisition. Since June 30th, we have paid down additional debt and have $12.3 million outstanding as of September 1st. We remain committed to quickly paying down the remaining balance under our credit facility and expect to be debt-free by the end of the second quarter of fiscal 2023, assuming we do not execute on additional acquisition opportunities before then. We also used operating cash flow to pay our 35th consecutive quarterly cash dividend of 10 cents per common share on June 30th and are pleased to declare a fiscal first quarter 2023 dividend of 12 cents per common share to be paid at the end of September. As I mentioned earlier, our commitment to paying an ongoing substantive quarterly cash dividend to our shareholders is unwavering as it maximizes visibility for total shareholder return and is fundamental to our long-term investment thesis. In that light, we are pleased to announce a newly authorized share repurchase program. The Board has authorized a share repurchase of up to $25 million through December 31, 2024. We view our repurchase program as a complement to our dividend program so that we can augment our returns to our shareholders. Additionally, based on the current commodity price outlook, we don't expect the increased dividend or share repurchase program to limit our ability to complete accretive acquisitions or participate in any drilling on our existing assets. Looking at our fourth quarter results in more detail, Net production at Del High declined 9% from the third quarter to 102.1 thousand barrels of oil equivalent or approximately 1,122 barrels of oil equivalent per day. Driving the sequential decrease was NGL production that was 36% lower primarily due to extended downtime at the NGL plant in April related to turbine issues, as well as a natural decline in oil volumes. Denberry is the operator at Delhi, and they are continuing to perform conformance workovers and upgrades to the facilities. Hamilton Dome net production increased slightly to 37.4 MBOE from 37.3 MBOE in the third quarter, primarily due to a higher number of operating days during the fourth quarter. On a per-day basis, production declined slightly from 415 to 411 barrels per day. During the fourth quarter, we received 11 AFEs from Merritt for expense and capital workovers. We will continue to support them in their efforts to restore production at previously shut-in wells, adjust water injection locations and volumes, and execute on other targeted maintenance projects. Net production for our Barnett shale assets for the fourth quarter decreased 1% to 303.9 MBOE or 3,339 BOE per day. Diversified Energy has been very active since becoming operator last October, including running one workover rig continuously throughout calendar 2022 to date. Fourth quarter net production for our Williston Basin assets increased 2% to 44.4 MBOE or 488 BOE per day, of which approximately 80% was oil. During April, we saw extended downtime due to severe winter weather that temporarily reduced oil production levels and impacted our fourth quarter production. In the immediate term, we continue to work closely with the operator, Foundation Energy Management, on high-grading expense workovers, recompletes, and sidetrack drilling opportunities. Technical evaluations remain underway to assess and high-grade our Pronghorn, Three Forks drilling locations. As I discussed earlier, on April 1st, we closed on our acquisition of natural gas-weighted assets in the Jonah Field in Wyoming. Net production for the fourth quarter was 2,077 BOE per day for a total of 189 MBOE. This included one BCF of natural gas, or 88% of the production was natural gas. The Jonah Field acquisition embodies our continued sharp focus on long-life production low-declined reserves that generate significant cash flow. The transaction also provides access to attractive Western markets, and we will continue to work closely with Jonah Energy and support their future development efforts in the field. With that, I will now turn the call over to Ryan to discuss our financial highlights.