HighPeak Energy, Inc.

and welcome to the High Peak Energy First Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. As a reminder, today's program may be recorded. I would now like to introduce your host for today's program, Stephen Tholen, Chief Financial Officer. Please go ahead, sir.

Good morning, everyone, and welcome to High Peak Energy's first quarter 2021 conference call. Representing High Peak today are Chairman and CEO Jack Hightower and President Michael Hollis. During today's call, we will make reference to our May investor presentation and our first quarter 2021 earnings release, which can be found on High Peak's website. Today's call participants may make certain forward-looking statements relating to the company's financial condition, results of operations, expectations, plans, goals, assumptions, and future performance. So please refer to the cautionary information regarding forward-looking statements and related risks in the company's SEC filings, including the fact that actual results may differ materially from our expectations due to a variety of reasons, many of which are beyond our control. We will also refer to certain non-GAAP financial measures on today's call, so please see the reconciliations in the earnings release which was issued on Monday afternoon. Our prepared remarks will begin on slide four of our May investor presentation I will now turn the call over to our Chairman and CEO, Jack Hightower.

Thank you, Steve, and I want to welcome each and every one of you this morning to our today's call. Our first quarter of 2021 operations went smoothly, even in light of the fact that we had the winter storm, URI. We are continuing to build upon and improve our peer-leading capital efficiency metrics We are definitely a growth story. And as I go through the presentation on the website, those of you who have access to it, turn to page four. But the one biggest important factor there is the fact that we had 150% growth from the end of the first quarter through the middle of May. And that's unprecedented relative to a growth story. We are extremely excited. We have a significant oil weighting growth story, and we are creating value very, very quickly with efficient operations. We're focused on fiscally responsible production growth and high operating margins. In the first half of May, as I mentioned, we're up to 8,300 barrels a day now with 90% oil cut. So our growth is continuing. That 8,300 barrels a day represents approximately 28 wells that are producing. And we have 11 additional wells with another well drilling that will add to that growth story as we get these wells online. Most of them have been completed, but we are continuing that program. What allows that is we have a continuous acreage position Of course, management's expertise contributes to our peer-leading end costs and full-cycle economics, and our EBITDA margins are over $41 a barrel at current commodity prices, which is either the leading or second-leading best returns in the industry. We definitely have a differentiated financial strategy. We're committed to low level or low leverage and currently have no debt. Recently, we hedged approximately 2,500 barrels a day of oil for one year at a price of $61.40 a barrel. That's in keeping with our conservative nature to keep a strong balance sheet. If you turn to slide five, We generated a profit, and we generated over $20 million of EBITDAX in the first quarter, which on a comparative basis is very, very successful. Our average production in the quarter was almost 5,300 barrels a day. We have zero debt and $9.6 million cash on hand. We've also completed the first phase of our company-owned water system. It's now fully operational. That's going to continue leading the ability for us to lower our lease operating expenses as we go forward. We are continuing our guidance with a one-rig program. We've been able, as you can see, to have tremendous production growth, and we are on track to have exit the year at the 10.5 to 12,000 BOE a day. We are achieving significant production and reserve growth while maintaining a conservative balance sheet. And we're going to continue focusing on low-cost operations, peer-leading capital efficiency, while we sustain our leading EBITDAX margins driven by high oil cuts and low-cost structure. And we will continue implementation of our ESG program. The most important thing here is that in every case, it's zero debt, but we've increased production almost 150% in five months. That's unprecedented in the industry. And we've been able to do that in drilling these additional wells and still maintaining our low-cost structure, which Mike will go over at a later date when we get into the operational overview. Our EBITDAX has gone up 187%, but as you start looking forward and projecting that EBITDAX, we're well over $200 million on an annual basis where we're going to exit the year. We also continued, as you recall in the interface presentation in our last presentation, we were averaging about 9,300 feet per lateral foot drill. And now we're up almost 64% and averaging approximately 14,000 feet. And we maintain our oil mix of 90% oil. It's been very effective in terms of our drilling. As costs are going up, we've been able to still maintain our capital efficiency and maintain our cost to drill complete, equip, and put facilities in place on the wells. Turning up to slide seven, this is also contributing to our operational efficiency. We lowered our lease operating expenses 28%. That will continue to take place as our production increases and as these facilities we've put in place and infrastructure we've put in place become more effective as we continue our growth story. Our cash G&A went down almost 42%. Again, that will continue to happen as we improve and continue our production. Our operating margin went up over 44%. So that's really unprecedented that we've been able to do that. We have a cash margin of $42.14 per BOE, which is one of the highest in the industry, and realized pricing of $54 a BOE. We're extremely excited about what we've been able to accomplish there in drilling over 84,000 feet with one rig, six wells drilled, completed, equipped, and facilities in place. 14,000 feet of average lateral length as opposed to 9,300 in the first quarter. and still maintaining $505 a foot for our drilling costs. You all know we have some inflation taking place in all costs, every single area from drilling rigs to completion to sand to pipe. Everything is going up and yet we've still been able to continue efficiency at the $505 a foot cost. So with that basic update, I'm going to turn the presentation over to Mike Hollis, our president, to talk about operations.