Ring Energy, Inc.

Good morning, and welcome to the Ring Energy fourth quarter and full year 2023 earnings conference call. All participants will be in 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, a Chairman of the Board and CEO, who will provide an overview of key matters for the fourth quarter and full year 2023, as well as our outlook. We'll then turn the call over to Travis Thomas, RING's Executive VP and Chief Financial Officer, who will review our financial results. Paul will then return with some closing comments 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 re-enter the queue later with additional questions. I would also note that we have posted an updated corporate presentation on 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 of development may differ materially from those projected in the forward-looking statements. Finally, 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 findings with the SEC. These documents can be found in the investment section of our website, located 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 So the most directly comparable measure on the GAAP are contained in yesterday's earnings release. Finally, as a reminder, this conference call is being recorded, and I'd now like to turn the call over to Paul McKinney, our chairman and CEO.

Thanks, Al, and thank you to everyone joining us today and your interest in Ring Energy. Looking back to 2023, it was a very good year. We ended it establishing new records during the fourth quarter and the full year, both operationally and financially. As we shared in our earnings release, we grew our year-over-year production-related sales volumes by 47%, our adjusted EBITDA by approximately 21%, and our adjusted free cash flow by 30%. This was a direct result of our team's ongoing efforts related to the key aspects of our growth strategy. The primary contributors to our success are directly related to the successful integration of the two acquisitions executed over the past 18 months, the Stronghold Energy II and the Founders Oil and Gas Assets acquisitions. Our disciplined and highly successful capital spending program also contributed significantly, as did our continuous focus on reducing operating costs. These acquisitions have further established our strategic foothold in the Central Basin platform of the Permian Basin and have significantly increased our undeveloped inventory of highly economic drilling locations. Another contributor to our success was the divestiture of certain non-core assets located in the Delaware Basin, the operated assets in the state of New Mexico, and a few assets in Gaines County, Texas. As a result, All our operated acreage is now located in the business-friendly state of Texas. Our average operating costs are lower since the assets sold had higher per BOE operating costs than most of our retained assets. And we move the undeveloped opportunities of these assets that were challenged to compete in our portfolio to operators that value them higher. The outperformance of our fourth quarter capital spending program is largely due to new well production performance that brought our sales volumes near the high end of guidance, providing for an 11% increase in our daily BOE production over the third quarter of 2023. During the fourth quarter, we invested $38.8 million in capital expenditures and drilled four horizontal wells, three in the CBP and one in the Northwest Shelf, and three vertical wells in the Central Basin Platform. We completed 10 wells, six in the CBP, and four in the Northwest Shelf. Additionally, costs for capital workovers, infrastructure upgrades, and leasing were also included. For the year ended December 31, 2023, we spent $152 million, which included cost of drill, complete and place on production, 20 horizontal wells, 14 in Northwest Shelf and 6 in the Central Basin Platform, and 11 vertical wells in the Central Basin Platform. Also included in the full-year capital spending were costs for capital workovers, infrastructure upgrades, recompletions, and leasing. Ring also participated in the drilling and completion of five non-operated wells in the Northwest Shelf and Central Basin Platform. Adjusted EBITDA was a record $65.4 million for the fourth quarter, which represents a 12 percent increase over the previous quarter of $58.6 million and a 16 percent increase over the fourth quarter of 2022, which was $56.3 million. Adjusted free cash flow for the fourth quarter was a record $16.3 million compared to $6.1 million in the third quarter of 2023, with the 165 percent increase primarily due to increased revenue and lower capital spending in the fourth quarter. Fourth quarter 2023 adjusted free cash flow increased 197 percent from 5.5 million for the fourth quarter of 2022. Adjusted cash flow from operations was a record $55.1 million for the fourth quarter compared to 48.5 million for the prior quarter and $47.4 million for the fourth quarter of the prior year, 2022. With respect to our cash return on capital employed, in 2023, our capital spending program generated slightly more than 17 percent return. At this point, and on behalf of the Board of Directors and management team, I would like to thank our employees for their hard work and dedication for the success we enjoyed in 2023. and to express my excitement for the opportunity to continue working along their side in the future as we further execute our value-focused proven strategy. With respect to our reserves, we ended 2023 with SEC total approved reserves of 129.8 million barrels of oil equivalent versus 138.1 million barrels of oil equivalent at the end of 2022. We benefited from reserve additions of 8.2 million barrels of oil equivalent from acquisitions and 4.8 million BOE from our internal development efforts. Offsetting these increases were 6.6 million barrels of oil equivalent of production, 5.7 million barrels of oil equivalent for the sale of non-core assets, 3.7 million barrels of oil equivalent related to changes in performance and other economic factors, and $5.3 million barrels of oil equivalent for reductions in year-over-year prices. In short, a significant driver in the reduction in our year-end SEC-approved reserves was associated with the decreased SEC prices. The PV10 of our total approved reserves was approximately $1.6 billion as of year-end, assuming SEC prices. Turning to the balance sheet, we paid down an additional $3 million of borrowings on our revolver in the fourth quarter. The level of debt reduction was impacted by the final net payment for the founder's acquisition in December of approximately $11.9 million. I would note that through year-end 2023, we paid down $30 million of borrowings since the closing of the transaction in August, which had a final net purchase price of approximately $62 million. And finally, we entered 2024 with liquidity of approximately $175 million, including a recently reaffirmed borrowing base of $600 million. Our debt at year end was $425 million. The company continues to remain focused on cash flow generation and reducing our debt. Looking at our guidance for 2024, while Travis will go through more details in his comments, I wanted to provide a high-level overview and strategic rationale driving our full-year plans. The immediately accretive 2022 Stronghold and 2023 Founders Acquisitions materially improved our size, scale, and drilling inventory. This backdrop provides key support and flexibility as we execute a 2024 drilling program specifically designed to organically maintain or slightly grow our oil production. Our current plan is to drill an average of five horizontal and six vertical wells per quarter. As in the past, we are focused on developing our highest rate of return inventory while also investing in necessary field infrastructure and other critical capital projects. For 2024, we are planning a two-rig phase drilling program, including one horizontal and one vertical rig. We are using a phased versus continuous drilling approach in 2024 to provide maximum flexibility to react to commodity price fluctuations and other market conditions in the current environment. After Travis provides his comments, I will come back with some additional thoughts on our business position and where we are headed. With that, I'll hand it off to Travis to discuss our recent financial results and outlook in more detail. Travis?