Ring Energy, Inc.

Good day and welcome to the Ring Energy Third Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Al Petrie of Investor Relations. Please go ahead, sir.

Thank you, Chuck, and good morning, everyone. We appreciate your interest in Ring Energy. We'll begin our call with comments from Paul McKinney, our chairman and CEO, who will provide an overview of key matters for the third quarter. We will then turn the call over to Travis Thomas, Ring's Chief Financial Officer, who will review our financial results. Paul will then return to discuss our future plans and outlook before we open the call for questions. Also joining us on the call today and available for Q&A during our Q&A session are Alex Dias, Executive Vice President of Engineering and Corporate Strategy, Marinos Baghdadi, Executive VP of Operations, and Steve Brooks, Executive VP of Land, Legal, Human Resources, and Marketing. During the Q&A session, we asked you to limit your questions to one and a follow-up. You're welcome to re-enter the queue later with additional questions. I would also note that we posted a Q3 2021 earnings presentation to our website this morning. During the course of this conference call, the company will be making forward-looking statements within the meaning of federal securities laws. Investors are cautioned that forward-looking statements are not guarantees of future performance, and those actual results or developments may differ materially from those projected in the forward-looking statements and the company can give no assurance that such forward-looking statements will prove to be correct. Ring Energy disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Accordingly, you should not place undue reliance on forward-looking statements. These and other risks are described in yesterday's press release and in our filings with the SEC. These documents can be found in the Investors section of our website at www.ringenergy.com. Should one or more of these risks materialize or should underlying assumptions prove incorrect, actual results may differ materially. 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 announcement released yesterday. Finally, as a reminder, this conference is being recorded. I would now like to turn the call over to Paul McKinney, our Chairman and CEO.

Thank you, Al. We appreciate everyone joining us today. As you know, our top priority coming into 2021 was to strengthen our balance sheet through debt reduction. Our strategy has been to capitalize on the organic opportunities within our portfolio to maintain our production and liquidity and focus on generating strong cash flows to further pay down debt. We are pleased with our third quarter results as we once again generated free cash flow and strengthened our financial position by paying down debt, which in turn increased our liquidity. Looking at our results in more detail, we generated adjusted EBITDA of $19.7 million and $2.6 million of free cash flow during the third quarter, while paying down $5.5 million of bank debt. We ended the third quarter with approximately 56 million of liquidity, a 9% increase from the end of the second quarter. During the third quarter of 2021, we sold 758,387 barrels of oil equivalent or 8,243 barrels of oil equivalent per day. which was 4% lower than this year's second quarter sales of 792,551 barrels of oil equipment, or 8,709 barrels of oil equipment per day. impacting third quarter sales volumes were certain events including new well completion activities of the company and an offset operator that temporarily reduced the production from a number of our higher producing wells. I am happy to report that the production from these wells has since recovered to normal levels. Additionally, the company continued to experience lower than anticipated natural gas sales due to certain third party processing facilities capacity constraints in both the central basin platform and the northwest shelf areas. In the northwest shelf, the plant restrictions also reduced oil sales due to higher pressures. Finally, many of the CTRs completed during the third quarter resulted in longer than anticipated downtime while the horizontal sections of the wells were being cleaned down. We performed 10 CTRs, including 7 in the Northwest Shelf and 3 in the Central Basin Platform. Year to date, through September 30th, we have performed a total of 24 CTRs, including 18 in the Northwest Shelf and 6 in the Central Basin Platform. Offsetting the impact of lower sales volumes was higher third quarter prices for both crude oil and natural gas. that contributed to an overall 3% increase in revenues over the second quarter. A key highlight of this year's third quarter was the continued success of our 2021 drilling programs. As shared in the past, we have aimed in 2021 to invest in only our highest rate of return drilling opportunities. Our programs have been designed to not only mitigate our production declines, but to maximize cash flow as well. During the third quarter, the production from our Phase 3 drilling program contributed very little to third quarter production volumes, but should allow us to capitalize on the currently strong commodity prices during the fourth quarter. Perhaps more importantly, though, in assuming these strong commodity prices continue, the production from our Phase 3 and Phase 4 drilling programs should significantly increase revenue and earnings early next year as a majority of our lower-priced hedges roll off. With respect to what we accomplished, during the third quarter, we utilized two rigs to successfully execute our Phase III drilling program of four wells, including two one-mile lateral wells in Northwest Shelf and two one-and-a-half-mile lateral wells in the Central Basin Platform, with all four wells at 100% working interest. Consistent with the success of our Phase I and Phase II programs from the first half of this year, all of the Phase III wells were drilled and completed on schedule and within budget. As I indicated earlier, the wells were placed online late in the third quarter between September 9th and September 18th, so the production from these wells had a very minor impact on our third quarter sales volumes. However, we have been very pleased with the production results from these wells to date since they are meeting or exceeding our pre-drill expectations. The success of our 2021 drilling programs and the continued improvement in crude oil prices encouraged us to commence our Phase 4 drilling program of two wells, including one 1-mile lateral in the northwest shelf area with approximately a 75% working interest and a 1.5-mile lateral well in the Central Basin Platform with 100% working interest. The northwest shelf 1-mile lateral was placed on production at the end of October and is currently exceeding expectations. The Central Basin Platform 1.5 mile lateral well was successfully drilled in October and is awaiting completion and is expected to be placed on production before year end. While the production from these wells will not have a big impact on our 2021 production, it should provide a nice increase as we enter 2022. With that, I will turn the call over to Travis Thomas to discuss our financials in more detail. I will then come back and make a few closing comments. Travis?