Ring Energy, Inc.

Good day and welcome to the Ring Energy second 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 a touch-tone phone. 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 will begin our call with comments from Paul McKinney, a Chairman of the Board and CEO, who will provide an overview of key matters for the second 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 the Q&A session are Alex Diaz, Executive Vice President of Engineering and Corporate Strategy, Marinos Baghdadi, Executive Vice President of Operations, and Steve Brooks, Executive VP of Land, Legal, Human Resources, and Marketing. During the Q&A session, we ask 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 have posted a Q2 2022 earnings corporate presentation to our website. During the course of this conference call, the company were 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 followings with the SEC. These documents can be found in the Investors section of our website, 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 release issued 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, and 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. As you know, on July 5th, we announced we had entered into a definitive agreement to acquire the assets of privately held Stronghold Energy. The operations are focused on the development of 37,000 net acres in the Permian Basin Central Basin Platform, where we also conduct operations. Before we get into a discussion about the pending transaction, we want to share with you the results of our very successful second quarter. Our second quarter results are a direct reflection of our ability to execute on our value-focused proven strategy. During the quarter, we benefited from strong performance of our drilling and completion program, our continued focus on operating cost control, and significantly higher realized oil and natural gas prices. The result was record-setting sales revenue and adjusted EBITDA. Adjusted EBITDA increased 33% when compared to this year's first quarter. In fact, we have already generated nearly as much adjusted EBITDA in the first half of 2022 as we did in all of 2021. We also posted another quarter of free cash flow generation, our 11th consecutive quarter, and reduced debt by an additional $10 million. Our posted sales volumes for the quarter were 9,341 barrels of oil equivalent per day, which was over 5% higher than the first quarter and at the higher end of our guidance range. As I said earlier, driving our higher end performance was a continued success. of our 2022 drilling program, as well as our capital work over program. Looking specifically at our drilling program, during the second quarter we drilled nine wells, completed seven wells, and began the completion process on four wells, with all activity for the period focused on our northwest shelf acreage. Leveraging our learnings from the last year, we remain squarely focused on the geology, selecting the best landing zones, and improving our completion methods. Two of the wells completed in the second quarter were one-mile horizontal wells that were drilled in the first quarter and had a working interest of 100%. In addition, we drilled and completed three one-mile horizontal wells with a working interest of 100% and two one-and-a-half-mile horizontal wells with a working interest of approximately 99%. We also drilled and began the completion process on an additional four one-mile horizontal wells. Two of the wells have a working interest of 100%, one has a working interest of 87.5%, and the fourth has a working interest of 75%. During the second quarter, our lease operating expenses expressed on a per BOE basis were 13% lower than the first quarter of 2022 due to lower costs and higher production. We attribute the lower cost to the efforts of our operating team and their focus on driving efficiencies in our operations. As you know, we have continued to execute on our program to convert wells from downhole electrical submersible pumps to rod pumps, a capital workover program we call CTRs. This program leads to longer economic lives of the wells, improves the ultimate recovery of oil and gas reserves, and has been a significant contributor to reducing our total cost of operations. As we look to the future, we have achieved our goal of optimizing artificial lift on our existing wells, and we will be performing fewer CTRs. During the second quarter, we performed four CTRs, including three in the Northwest Shelf and one in the Central Basin Platform. With respect to our capital spending, we spent $41.8 million during the quarter and exceeded our second quarter guidance of $34 to $36 million. The variance was primarily due to accelerated completion activities on the four additional wells that were placed on production in early July. Our full year capital spending guidance of 120 to $140 million remains unchanged. We have simply changed the timing and pace of spending this quarter as a result of the efficient execution of our drilling and completion program. We look forward to our continued efforts in this regard during the second half of 2022, as we drive additional efficiencies to increase production. The combined result of our efforts to date has been free cash flow generation that was used to reduce our debt and further strengthen our balance sheet. During the first half of 2022, we paid down $20 million in debt and lowered our leverage ratio to 2.1 times, which was almost a full turn and a half lower than where we stood at year-end 2021. We ended the second quarter with $81.5 million of liquidity, which was approximately 32% higher than at the end of 2021 and a 58% increase from the same time last year. Looking to the third quarter, we expect to drill seven to nine wells while completing and placing on production eight to 10 wells and expect sales volumes to be higher than the second quarter and range between 9,500 to 9,900 barrels of oil equipment per day. In response to the strong performance we experienced in the second quarter and to date in the third quarter, we are increasing our full year sales volume guidance range to 9,300 to 9,700 barrels of oil equipment per day from our previous guidance of 9,000 to 9,600 barrels of oil equipment per day. With respect to the fourth quarter, We intend to provide more insight after we close the pending stronghold acquisition. We believe there is a great opportunity to take advantage of the improved capital efficiency of the combined portfolio to meet or exceed our production growth goals for less capital. Having said all of this, we will continue to retain the ability to adjust our drilling and other capital spending programs to reflect any material changes in commodity prices or if necessary. So with that, I will turn it over to Travis to discuss our financial results in more detail. Travis?