Ring Energy, Inc.

Good day and welcome to Ring Energy's first quarter 2022 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 telephone keypad. 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 Al Petrie, Investor Relations for Ring Energy. Please go ahead.

Thank you, Operator, and good morning, everyone. We appreciate your interest in Ring Energy. We'll begin our call with comments from Paul McKinney, our Chairman of the Board and CEO, who will provide an overview of key matters for the first 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 up for questions. Also joining us on the call today and available for the Q&A session are Alex Diaz, Executive VP of Engineering and Corporate Strategy, Marinos Bagdadi, 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 any additional questions. I would also note that we have posted a Q1 2022 earnings corporate presentation to our website. 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 those 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 vary 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 call is being recorded. I would now like to turn the call over to Paul McKinney, our chairman and CEO.

Thanks, Al. Welcome, everyone, and thank you for your interest in Ring Energy. We appreciate you joining us today to discuss our recent results and outlook for the rest of the year. We are executing on our value-focused proven strategy, the results for which can be clearly seen in our operational and financial performance this quarter. We believe our first quarter sales results set a solid foundation for 2022 and are indicative of the increase in revenue and cash flow we anticipate for the remaining quarters this year as long as prices continue to remain strong. As you know, first quarter sales volumes were 8,870 barrels of oil equivalent per day, which exceeded our guidance range by almost 2%. Contributing to this performance were two key operational factors. First, all four of the central basement platform wells we drilled during the first quarter were placed on production sooner than originally anticipated. Second, we were able to complete the installation of certain field compressors, which benefited natural gas sales. We also benefited considerably from higher realized oil and natural gas prices as a majority of our lower priced oil hedges expired at the end of 2021 and none of our natural gas sales were hedged. The combination of strong sales volumes, higher realized pricing, and our ongoing focus on cost control enabled us to grow adjusted EBITDA by almost 50% compared to the fourth quarter. We generated approximately $36 million of adjusted EBITDA during the first quarter, which was almost half of what we generated in all of last year. Although we increased our activity and placed four Central Basin Platform wells online ahead of schedule, capital spending for the first quarter came in under budget. Our team has done a great job executing our drilling, completion, and capital work over programs, driving further efficiencies in our capital spending. With higher adjusted EBITDA and lower capital spending, we generated almost $13 million in free cash flow this quarter. We used the majority of that to pay down $10 million of debt, and we ended the quarter with $71 million of liquidity, which was approximately 16% higher than at the end of 2021, and a 57% increase from the same time last year. With respect to our development initiatives, we decided to take advantage of a strong commodity price outlook and implement a continuous one-rig drilling program during 2022. Our program is designed to remain within cash flow and drive production, revenue, and adjusted EBITDA growth and to significantly lower our leverage ratio by the end of the year. As in the past, we are targeting our highest rate of return inventory across our Central Basin Platform and Northwest Shelf acreage. As you know, we initiated our 2022 development campaign in late January and drilled six wells in the first quarter. This included four wells in the Central Basin Platform and two wells in the Northwest Shelf, with all wells having 100% working interest. As I mentioned, the four Central Basin Platform wells were placed on production in the first quarter, and we have since completed and brought online the two Northwest Shelf wells. We are encouraged by the results we have seen to date from our 2022 drilling program. Leveraging our learnings from last year, we remain squarely focused on the geology, selecting the best landing zones, and improving our completion methods. We are also continuing our program to convert wells from downhole electrical submersible pumps to rod pumps, a capital workover program we call CTRs. We performed four CTRs in the northwest shelf in the first quarter. As we have discussed in the past, the long-term benefit of our targeted CTR program allows us to significantly reduce our operating costs through lower electricity usage and considerably lower future repair costs. These lower operating costs lead to longer economic lives of the wells and improve the ultimate recovery of oil and gas reserves. Looking forward to the second quarter, we expect to drill 8 to 10 wells while completing and placing on production 7 to 9 wells. For the full year, we are still planning to drill between 25 and 33 wells and complete and place online between 25 and 30 wells. Of course, we will continue to retain the ability to adjust our drilling and other capital spending programs to reflect any material changes in commodity prices. So with that, I will turn it over to Travis to discuss our financial results in more detail. Travis?