Ring Energy, Inc.

Good morning and welcome to Ring Energy's third 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 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 with Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. We will 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 quarter. We'll 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 VP 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 reenter the queue later with additional questions. I would also note that we have posted a Q3 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 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 Securities and Exchange Commission. 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 can also include references to certain non-GAAP financial measures. Reconciliation in 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'd like to now 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. The third quarter marked a transformational period for our company and our shareholders as we announced and completed the acquisition of Stronghold Energy's assets. As you know, these operations are focused on the development of 37,000 net acres in the Permian Basin's Central Basin Platform, where we also conduct operations. As a reminder, we closed the acquisition on August 31st, so the third quarter only reflected one month of Stronghold's operations. This bodes well for the fourth quarter during which we will record three full months of results with the stronghold assets, which should set us up for a strong finish to the year. We are extremely pleased with our third quarter results, which is a direct reflection of our ability to execute on our value-focused, proven strategy, in addition to the acquisition of the stronghold assets. Our third quarter benefited from the continued strong performance of our legacy drilling, completion, recompletion, and capital workover programs, as well as our ongoing focus on operating cost control. While pricing did pull back some from the levels experienced during the second quarter, overall, they were still strong, and we continued to benefit. The combined result was record quarterly production, revenue, net income, and adjusted EBITDA. We also posted another quarter of free cash flow generation, our 12th consecutive quarter, and we're pleased to pay down $17 million of debt since we closed the acquisition on August 31st. Our posted sales volumes for the quarter were 13,278 barrels of oil equivalent per day, which was 42% higher than the second quarter. As I said earlier, primarily driving the increase was the addition of one month of sales volumes from the stronghold assets, as well as a continued success of our 2022 drilling, completion, recompletion, and capital workover programs. With respect to the fourth quarter, we stand by our previously released guidance and expect sales volumes to be between 18,000 and 19,000 barrels of oil equivalent per day due to the three full months of production from the stronghold assets. Looking specifically at our drilling program, During the third quarter, we drilled eight horizontal wells, including five in the northwest shelf and three in the central basin platform, thereby bringing the total number of horizontal wells drilled during the first nine months of the year to 23. During the third quarter, we completed nine horizontal wells, including four wells that were drilled in the second quarter and five wells drilled in the third quarter, bringing the total number of horizontal wells completed and placed on production year-to-date to 20. We are very pleased with the results from our Northwest Shelf and Central Basin Platform horizontal wells and attribute our success to remaining focus on the geology, selecting the best landing zones, and improving our completion methods. We also believe that remaining focus on these technologies will bode well in our future drilling and completion activities in the newly acquired stronghold properties. With respect to the other activity completed during the third quarter, we recompleted three wells on the Stronghold Acquisition acreage and converted six horizontal wells with ESPs to rod pumps, something we call CTRs. Five of the CTRs were in the Northwest Shelf and one was on our legacy CBP acreage. As many of you know, our CTR program has been a significant contributor to reducing our total cost of operations. At this point, We have converted the majority of our inventory of CTR candidates and, moving forward, will be performing fewer CTRs. With respect to capital spending, excluding our investment for the stronghold transaction, we spent $40.3 million during the third quarter compared to $41.8 million during the second quarter. We continue to efficiently execute on our drilling completion program that is designed to drive additional efficiencies and increase production rates. For the fourth quarter, we expect to spend $42 to $46 million, which includes the drilling of four horizontal wells on our legacy acreage and four to five vertical wells on our stronghold acreage. We expect to complete and place on production seven horizontal wells and two to three vertical wells. The combined results of our efforts to date has been free cash flow generation that was used to reduce our debt and further strengthen our balance sheet. we ended the third quarter with a leverage ratio of 1.4 times, which was 33% lower than the 2.1 times at the end of the second quarter, and 60% lower than the 3.5 times leverage ratio we had at the beginning of the year, exceeding expectations we set for ourselves. As you know, the bar and base of our credit facility was increased more than 70% to $600 million due to the acquisition and continued strength of our legacy business, And after paying down $17 million in debt, we ended the quarter with more than $165 million of liquidity, which places us in a strong position as we finish the year and make plans for 2023. So with that, I will turn it over to Travis to discuss our financial results in more detail. Travis?