Centennial Resource Development, Inc.

Good morning and welcome to Centennial Resource Development conference call to discuss its fourth quarter and full year 2021 earnings. Today's call is being recorded. A replay of the call will be accessible until March 3rd, 2022 by dialing 855-859-2056 and entering the conference ID number 259-7505 or by visiting Centennial's website, at www.cdevinc.com. At this time, I will turn the call over to Hayes Mabry, Centennial Senior Director of Investor Relations, for some opening remarks. Please go ahead.

Hayes Mabry Thank you, Justin, and thank you all for joining us on the company's fourth quarter earnings call. Presenting on the call today are Sean Smith, our Chief Executive Officer, George Glipis, our Chief Financial Officer, and Matt Garrison, our Chief Operating Officer. Yesterday, February 23rd, we filed a Form 8K with an earnings release reporting fourth quarter and full year earnings results, as well as operational results for the company. We also posted an earnings presentation to our website that we will reference during today's call. You can find the presentation on our website homepage or under presentations at www.cdevinc.com. I would like to note that many of the comments during this earnings call are forward-looking statements that involve risk and uncertainties that could affect our actual results and plans. Many of these risks are beyond our control and are discussed in more detail in the risk factors and forward-looking statement sections of our filings with the SEC, including our annual report on Form 10-K for the year ended December 31, 2021, which we expect to file with the SEC later this afternoon. Although we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance, and actual results or developments may differ materially. We may also refer to non-GAAP financial measures that help facilitate comparisons across periods and with our peers. For any non-GAAP measure we use, a reconciliation to the nearest corresponding GAAP measure can be found in our earnings release or presentation, which are both available on our website. And with that, I'll turn the call over to Sean Smith, our CEO. Thank you, Hayes.

Good morning, and welcome to Centennial's fourth quarter earnings call. I'll start off by saying that 2021 was an outstanding year for Centennial. both operationally and financially. We generated over $200 million of free cash flow and repaid more than $300 million in borrowings under our credit facility. As a result, we overwhelmingly achieved our primary goal for 2021 of significantly reducing our leverage and total net debt. We also delivered oil on the high end of our increased guidance range due to strong well results and solid execution in the field. Additionally, we accomplished our ESG goals for the year and continue to look for ways to advance our already strong track record. These achievements are a testament to the focus, hard work, and talent of our employee base. The year-end 2021 results, combined with a robust multi-year outlook have provided us with the confidence to announce a meaningful first step in Centennial's commitment to return capital to shareholders. As we evaluate the shareholder return landscape, we believe that returning capital in the form of a measured share repurchase program will deliver the most value for our shareholders over time by enhancing the per share ownership and per share financial and operational metrics of the company. As such, we are excited to announce that our board has authorized a $350 million share repurchase program over the next two years to enable us to deliver that value, which equates to approximately 15% of our current market cap. Our intent is to begin executing this repurchase program once we have achieved our leverage target of approximately one times or less, a level that we believe is optimal for our business and provides resiliency through the inherent cyclical nature of our industry. After achieving this leverage target, which we anticipate will occur during the second quarter of this year, we will initiate the disciplined execution of our repurchase program. For us, discipline means being in the market on both a regular basis as well as an opportunistic basis in moments of more pronounced market dislocation. We believe this strategy will ultimately deliver enhanced returns for our shareholders as we continue the consistent execution of our development plan. Coincident with our share repurchase program, we will also remain disciplined regarding our rig cadence and capital deployment. Our current two-rig program will deliver over 10% oil production CAGR over the next two years and significant free cash flow that will ensure that we can execute on the share repurchase program, grow production, as well as continue to de-lever the company. We believe this three-pronged game plan will be resilient through commodity price volatility, which gives me the confidence that we can successfully execute. We expect that today's announcement will be a first step in a longer-term shareholder return strategy that is supported by the company's fundamental asset quality inventory depth, and track record of execution that will deliver value to shareholders over time. With that said, I'll turn it over to George to review our financial results, 2022 guidance, and provide additional details on our buyback program.