PDC Energy, Inc.

Good day, ladies and gentlemen, and welcome to the PDC Energy Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will follow at that time. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Kyle Sork, Investor Relations. You may begin, sir.

Thank you, and good morning. On today's call, we have President and CEO Bart Brookman, Executive Vice President Lance Locke, Chief Financial Officer Scott Myers, and Senior Vice President of Operations Dave Lillo. Yesterday afternoon, we issued our press release and posted a presentation that accompanies our remarks today. We also filed our Form 10-Q. The press release and presentation are available on the Investor Relations page of our website, www.pdce.com. On today's call, we will reference both forward-looking statements and non-U.S. GAAP financial measures. The appropriate disclosures and reconciliations can be found on slide two in the appendix of that presentation. With that, I'll turn the call over to Bart Berkman.

Bart Berkman Thank you, Kyle, and hello, everyone. A tremendous quarter for the company as PDC's era of free cash flow generation and shareholder returns continues to accelerate. Throughout the call, You will see operating and financial results, which I believe are top tier for the industry and truly differentiate PDC. Fourth quarter, free cash flow of $165 million on a capital investment of $178 million. Both better than expectations. Production for the quarter, 17.4 million barrels of oil equivalent. in line with our expectations and currently we have steady state, highly efficient operations in both basins delivering strong drilling and completion results. The company's balance sheet continues to strengthen and debt reduction remains a priority. Leverage ratio quarter end 1.2 and net debt for the company of $1.3 billion. Costs for the company continue to be well-managed. Lifting costs came in at $2.43 per BOE, and for the quarter, $38 million was returned to the shareholders as we initiated the company's first dividend and continue to repurchase shares. Year-to-date, approximately $60 million has been returned to shareholders, and we anticipate the total shareholder return will exceed $180 million by year-end 2021. Now, let me cover the company's outlook through year-end 2023, a reflection of the quality of our assets and our execution capabilities. We anticipate free cash flow will target $2.5 billion on a capital spend of approximately $1.8 billion. A reinvestment rate 40 to 45 percent of our adjusted cash flow from operations, and simultaneously, we expect to drive our leverage ratio well below 1.0 and pay down our debt by approximately a billion dollars. This robust free cash flow provides an opportunity to return over a billion dollars to our shareholders through dividends and share repurchases. all while we control costs, continue to improve the efficiency in our operations, and modestly grow the production for the company. Quite a story for PDC. As I conclude my comments today, let me update you on PDC's ongoing ESG progress. Our early fall sustainability report, which I encourage all of you to read, will detail the great strides we have made in many areas. Today, I would like to hit some of the key highlights. The company has devoted considerable engineering and environmental resources towards managing our emissions, and I am proud to announce quantifiable goals through 2025 that include a 60 percent reduction in greenhouse gas emissions and a 50 percent reduction in methane intensity. Currently, PDC has also achieved a flaring percentage for the company of approximately 0.1%, which I believe is top tier for the industry. Our goal is to achieve zero routine flaring by 2025, a significant time acceleration from our prior commitments. And additionally, So important in our business today, I would like to thank all of our field operations in Texas and Colorado for their ongoing focus on safety. Both basins just celebrated three-plus years without a single lost-time injury. As we look at the ever-evolving world of ESG, I am pleased with the tremendous progress we have made and the goals we have set as a company. the environmental and emission controls, the safety and welfare of the PDC employees, and the extensive focus on our communities and charitable giving and the ongoing governance improvements for the company. With that, I'll turn this call over to Dave Lillo for an update on PDC's operations. Thanks, Bart.