Ring Energy, Inc.

Good morning and welcome to the Ring Energy First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. Should you need assistance, please send to a conference specialist by pressing the star key followed by zero. Please also note today's event is being recorded. At this time, I'll turn the floor over to Al Petrie, Investor Relations for Ring Energy. Sir, you may begin.

Thank you, Operator. 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 of 2024, as well as our outlook. We will 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 up 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 ask you to limit your questions to one and a follow-up. You are 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 was making far-looking statements within the meaning of federal securities laws. Investors have cautioned that far-looking statements are not guarantees of future performance, and those actual results or developments may differ materially from those projected in those far-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 fillings with the SEC. These documents can be found in the Investors 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. Reconciliation of these non-GAAP financial measures to the most directly comparable measure under GAAP are contained in yesterday's earnings release. 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.

Thank you, Al, and thank you for everyone joining us today and your interest in Ring Energy. As you may have read by now, we began 2024 with a solid first quarter. Sales volumes exceeded the high end of our guidance, while operating expenses and capital spending both came in below our guidance ranges, placing us in a strong position for the rest of the year. The primary driver of our sales volume performance was the robust returns from our drilling program and reduced downtime since the winter storm we incurred in January. The key factors contributing to our lower than expected capital costs were increased efficiencies associated with our well completions and the improved logistics of drilling our wells. Additionally, we benefited from lower costs realized by an improved macro environment associated with the drilling and completion services for our wells. LOE on a per-BOE basis came in below our guidance range as well, primarily due to our continuing focus on reducing costs generally, and more specifically associated with the progress we were making integrating the founders' assets into our operations. These efforts not only led to lower costs, but lower downtime as well that contributed to our sales volumes performance as mentioned earlier. Our results this quarter are a direct reflection of the dedication and commitment of our employees in both the field and the office. And on behalf of the board and management team, we thank all of you for your hard work. With respect to our performance this quarter, We sold 13,394 barrels of oil per day, which was 5% higher than the top end of our sales guidance. On a total product basis, we reported first quarter 2024 sales volumes of 19,034 barrels of oil equivalent per day. That was 3% above the top end of our BOE sales guidance. As important, we increased oil to 70% of our product mix. Lease operating expenses, or LOE, during the first quarter were $10.60 per BOE. The combined impact of higher than expected sales volumes and lower than anticipated LOE per BOE led to adjusted net income of $20.3 million, adjusted EBITDA of $62 million, and net cash provided by operating activities of $45.2 million. During the first quarter, we invested $36.3 million in capital expenditures, which included the drilling and completion of five horizontal wells, three of which were in the Central Basin Platform and two in the Northwest Shelf, and the drilling and completion of six vertical wells, all in the CBP South, three in Ector County and three in Crane County. Total capital spending included capital workovers, infrastructure upgrades, and leasing as well. Adjusted free cash flow, was $15.6 million for the first quarter of 2024, which was 48% higher than the same quarter a year ago and represents the 18th consecutive quarter of positive adjusted free cash flow for the company. Turn to the balance sheet. We paid down $3 million of debt in the first quarter and $33 million since the closing of the founder's acquisition in late August. This allowed us to exit the quarter with $179.3 million in liquidity. Regarding our guidance for the year, we still plan to drill an average of five horizontal and six vertical wells per quarter, which is consistent with what we did in the first quarter. We intend to continue utilizing a phased two-rig drilling program, including one horizontal rig and one vertical rig, as opposed to a continuous drilling approach to retain the flexibility to react to changing commodity prices and market conditions, as well as manage our quarterly cash flows. Our phase drilling program is designed to organically maintain or slightly grow our oil production, and so we are not changing our full year production guidance at this time. Regarding the second quarter, we anticipate our production to range between 18,500 and 19,100 barrels of oil equivalent per day, and perhaps more importantly, our oil production to range between 13,000 and 13,400 barrels of oil per day. This implies an oil mix of approximately or slightly more than 70%. With that, I will turn this over to Travis to provide more details on the quarter and will return with closing comments before we open the call for questions. Travis.