HighPeak Energy, Inc.

Good morning, everyone. And thank you for standing by. And welcome to the High Peak Energy 2021 Second Corner Earnings Conference Call. At this time, all participants are in a 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. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Stephen Solon, Chief Financial Officer. Please go ahead.

Thank you, Norma. Good morning, everyone, and welcome to High Peak Energy's second 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 August investor presentation and our second quarter 2021 earnings release, which can be found on High Peak's website at www.highpeakenergy.com. 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 Monday afternoon. I will now turn the call over to Chairman and CEO, Jack Hightower.

Thank you, Stephen. Good morning, everyone, and welcome to today's call. As expected, our second quarter proved to be another successful quarter for High Peak, and this is evidenced by our continued positive well results, capital efficiency, and high operating margins. Our production increased. And our EBIDACs increased over 90% quarter over quarter. Our liquids-rich production stream of 90% oil and 96% liquids continues to differentiate us from our peers and will continue in the future. Our barrel of oil equivalent is much more valuable and results in these higher profit margins. We currently have multiple wells that are in the early stages of flow back. And in addition, we recently added a second rig, which will further accelerate our growth profile into 2022. We are definitely a growth company, as will be evident after our presentation and discussing our plans into the future. I'd like you to refer to the highlights in the press release and then turn to slide three of our August investor presentation. This slide, along with our discussion, will emphasize and further discuss the highlights that we outlined in our press release. Our second quarter, we focused very much on fiscal responsibility and production growth and high operating margins. As mentioned in the press release, we averaged over 8,800 barrels of oil equivalent per day up 66% from our average in quarter one production. We have multiple wells that are in early stages of flow back, and as these wells ramp up and other wells come online, we expect our production to continue going forward. We picked up our second rig in early third quarter, and the addition of the second rig will accelerate our growth profile going into early 2022. Our high Our contiguous acreage position, our high percent of operated properties allows us to control our own destiny, which is very important in today's business climate. We effectuated some acreage swaps during the second quarter, which also increased our percentage of operated properties. In addition, we made multiple acquisitions or we will be in the process of closing those acquisitions that will add approximately 6,200 net acres to our acreage position. And our production from these acquisitions will add up to almost 1,400 barrels a day for the remainder of the year, the remainder of 2021, which is not included in our guidance as we discuss that later on. We expect to close these acquisitions in the third quarter. It'll increase our working interest in some of our operating units, and with our high oil cut and our expertise, contribute to our leading all-in costs in full cycle economics. Our second quarter price realized an average price of $60.40 a barrel equivalent, and our operating cash margin was $51.35 per BOE. Both of these Realized price and cash operating margins are peer leading. So we're extremely excited about our capital efficiency and what's going on. And I'll refer now to slide four in the presentation. We are continuing to deliver capital efficient oil weighted growth. Our production increased 66%. in effect compared to our first quarter from 8,800 barrels versus 5,300 barrels in the first quarter. Our EBITDA went up from almost 91% to $38.4 million. That was a 91% increase, as mentioned. Our production stream of 90% oil and 96% liquids drives our high margins. And as mentioned before, these are peer-leading numbers, and it gives us different BOEs and more valuable income than our peers have with the same amount of production. We also increased our lateral feet drilled quarter over quarter almost 40%, and that's a tribute to our drilling and operations team being able to do that. So we're drilling faster. and we're drilling more efficient wells. And this allows us to have more exposure to the reservoirs. Our balance sheet continues to stay strong, as evidenced by our small amount of debt. In fact, our net debt is only $1.2 million. And of course, we have $120-something million borrowing base. And I'll refer to that a little bit later. As we go into slide four, Some of our key metrics there are we have realized prices of $60.40, which I mentioned, 92% of WTI index on an unhedged basis. That is absolutely peer leading and phenomenal relative to some of our other peers. Our hedged BOE price was still $59.10 a barrel, which is also extremely high compared to our peers. Our hedged barrels are at $62 a barrel through the second quarter of 2022, and this represents less than 50% of our forecasted oil production, giving us good exposure to strong oil prices. Our cash margin in the second quarter was 75% of the oil and gas WTI index. Again, this is higher than any of our peers, and we're extremely excited about that. Our cash G&A decreased by over 45% this quarter, and that helps us drive high operating margins. We have a very efficient organization. Our CAPEX in the first quarter totaled $46.8 million, and $44 million of that was related to DC ENF costs. And we always include, for full transparency, our equipment costs, our facility costs, and our water handling costs for the first six months. We drilled 106,400 feet of lateral feet, not including two horizontal wells. our two horizontal saltwater disposal wells. And our average daily production was up over 300% during the last four quarters. So as mentioned, we are a growth company, and we expect to continue that growth as we go forward. And we have the 5,000 barrels a day hedged, which is at a price of approximately $62 a barrel through the first quarter of 22. Now I'm going to turn the program over to Mike Hollis, who is our president, and he's going to talk more about our capital efficiency and our operations.