Diamondback Energy, Inc.

Good day, ladies and gentlemen, and welcome to the Diamondback Energy Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference has been recorded. I would now like to introduce your host for today's conference, Adam Lawless, Director of Investor Relations. Sir, you may begin.

Thank you, Tawanda. Good morning, and welcome to Diamondback Energy's fourth quarter 2018 conference call. During our call today, we will reference an updated investor presentation, which can be found on Diamondback's website. Representing Diamondback today are Travis Dye, CEO, Mike Hollis, President and COO, and Tracy Dix, CFO. During this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance, and businesses. We caution you that actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we will make reference to certain non-GAAP measures. The reconciliations with the appropriate GAAP measures can be found in our earnings release issued yesterday afternoon. I'll now turn the call over to Travis Sass.

Thank you, Adam. Welcome, everyone, and thank you for listening to Diamondback's fourth quarter 2018 conference call. 2018 was another transformational year for Diamondback. We successfully closed three large acquisitions in the fourth quarter, including our acquisition of Energen, which combined nearly doubled our core acreage position. Diamondback now has over 364,000 net acres in the core of the Midland and Delaware basins, along with another 96,000 net acres of Permian assets, the majority of which are on the central basin platform, which we are working to divest as part of our grow and prune strategy. Diamondback grew production 53% year-over-year without giving the effect to the energy merger and exited the year producing over 250,000 BOEs per day in December after closing the merger. Our reserves are up almost 200% year-over-year to just shy of 1 billion barrels of oil equivalent and our organic reserve replacement ratio for 2019 was over 450%. Drill bit F&D was essentially flat year over year at $7.28 a barrel, and proved developed F&D was $10.44, highlighting the combination of our acreage quality and capital efficient cost structure. Commodity prices declined dramatically in the fourth quarter, and as a result of this volatility, Diamondback outspent cash flow for the quarter. This is against our core operating philosophy, and we reacted as quickly as possible after closing the merger by announcing a reduction in activity for 2019 and subsequently dropped three operating drilling rigs and two completion crews over the course of the last two months. Moving to 2019, we trimmed our capital budget versus previously described expectations in December and we still expect to grow production 27% year-over-year, while also paying a 50% larger dividend than we did in 2018, all within operating cash flow. As Mike will explain in detail later on in this call, we are realizing more synergies faster than expected after closing the Intergen merger, all of which are reflected in our capital budget and projected operating costs in 2019. Lastly, we're actively working on dropping down the remaining mineral and royalty assets held at the Diamondback level to VIPER and expect to do so at some point in 2019. With these comments now complete, I'll turn the call over to Mike.