Ring Energy, Inc.

Good morning, and welcome to the Ring Energy Second Quarter 2024 Earnings Conference Call. At this time, all participants will be in a listen-only mode. A question and answer session will follow the formal presentation. To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, then 2. Should you need assistance, please signal a conference specialist by pressing the star key, followed by 0. 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 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 second quarter of 2024, as well as our updated 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 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, and Shawn Young, VP of Operations. 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 security 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. 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. Reconciliations 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.

Thanks, Al, and thank you, everyone, for joining us today and your interest in Ring Energy. Before I begin to discuss our second quarter results, I wanted to welcome two new Ring executives, Sean Young and Philip Feiner. As we announced in late June, Sean was promoted to lead our operations team, and as announced yesterday, Philip joined us last week to lead the legal and human resources efforts here. All of us here at Ring are pleased to be working with them and look forward to properly growing Ring Energy together for the benefit of our stockholders. Let's now turn our attention to the subject at hand, our second quarter performance. We are pleased to post record sales volumes and record cash generation for both the second quarter and year to date. We use our excess cash from this record quarter to pay down $15 million of debt and intend to make additional and material progress reducing debt over the coming quarters, subject, of course, to oil remaining at the range or in the range of current and or more recent prices. Similar to the first quarter, second quarter sales volumes exceeded the high end of our initial guidance, while operating expenses and capital spending both came in below our guidance ranges. Combined with our improved operational outlook for the second half of 2024, we are well positioned for ongoing success for the remainder of the year and into next. The primary driver of our record sales volumes in the second quarter was the continued strong returns from our drilling program and the outstanding performance of our operating team maintaining our existing production. The result for the period was a sale of 13,623 barrels of oil per day, which was 2% higher than the first quarter. On a total product basis, we reported second quarter 2024 sales volumes of 19,786 barrels of oil equivalent per day, which was 4% above the first quarter. Another point to make is a high oil percentage of our product mix of 69%. We will continue to focus our capital spending on undeveloped opportunities with high oil percentage, especially during these times of favorable realized pricing relative to natural gas. Turning over to lease operating costs, lease operating expenses, or LOE, during the second quarter were $10.72 per BOE, which was below the low end of our guidance range. Similar to first quarter performance, our second quarter LOE results reflect our continuing focus on reducing costs and downtime and completing the integration of the founders' assets into our operations. I'd like to thank our operating team for their hard work and their dedication to these efforts. Thank you, everyone. Higher than anticipated sales volumes and lower than expected LOE per BOE supported by a backdrop of solid oil pricing resulted in record adjusted EBITDA of $66.4 million for the second quarter as well as year-to-date growth of 15%. Looking at CapEx, we were pleased to once again post spending levels that were less than the low end of our guidance, while the number of producing wells drilled and completed was at the high end of our guidance. The key factors contributing to our lower than expected capital costs were increased efficiencies associated with our well completions, enhanced drilling and related logistics, and an improved macro environment associated with our drilling and completion services costs. During the second quarter, we invested $35.4 million in capital expenditures, which included the drilling and completion of five horizontal wells in the CBP and the drilling and completion of six vertical wells in CBP South, three in Ector County and three in Crane County. Total capital spending also included capital workovers, infrastructure upgrades, and leasing. Record adjusted EBITDA and lower than expected CapEx resulted in record adjusted free cash flow of $21.4 million for the second quarter of 2024, which was 70% higher than the same quarter a year ago and represents the 19th consecutive quarter of positive adjusted free cash flow for the company. Combined with our success in the first quarter, we posted record year-to-date adjusted free cash flow of $37 million that was 60% higher than last year. Turning to the balance sheet, we used a portion of our adjusted free cash flow to pay down $15 million of debt in the second quarter and $48 million since closing the founder's acquisition last August. As a result, we ended the second quarter with liquidity of $194.1 million and a leverage ratio of 1.59 times, which was 5% lower than at the beginning of the period. Regarding our guidance for the year, We are updating our full year 2024 outlook to reflect our first half performance and a solid view for the remainder of 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 second quarter. This approach provides flexibility to react to changing commodity prices and market conditions, as well as manage our quarterly cash flow. As we have discussed in the past, our drilling program is designed to organically maintain or slightly grow our oil production. Given the success we are seeing in our development efforts, we are increasing our full year 2024 production guidance to 13,200 to 13,800 barrels of oil per day and 19,000 to 19,800 barrels of oil equivalent per day. which represents an increase of 4% and 5%, respectively, from our initial guidance earlier this year, assuming the midpoints. Regarding the third quarter, we anticipate sales volumes of 19,000 to 19,800 barrels of oil equivalent per day, and more importantly, our oil production to range between 13,200 and 13,800 barrels of oil per day, or an oil mix of approximately 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?