U.S. Energy Corp.

Good morning, ladies and gentlemen, and welcome to U.S. Energy Corps' second quarter 2023 results conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Monday, August 14, 2023. I would now like to turn the conference over to Mason McGuire. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to U.S. Energy Corp's second quarter 2023 results conference call. Brian Smith, our Chief Executive Officer, will provide an overview of our operating results and discuss the company's strategic outlook. Our Chief Financial Officer, Mark Zajac, will provide a more detailed review of our financial results. U.S. Energy issued a press release summarizing operating and financial results for the three months ended June 30, 2023. This press release, together with the accompanying presentation materials, are available in the investor relations section of our website at www.usnrg.com. Today's discussion may contain forward-looking statements about the future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including risks described in our periodic reports filed with the Securities and Exchange Commission. Except as required by law, we undertake no obligation to update the forward-looking statements. Further, please note that non-GAAP financial measures may be disclosed during this call. A full reconciliation of GAAP to non-GAAP measurements are available in the latest quarterly earnings release and conference call presentation. With that, I would like to turn the call over to Ryan Smith.

Good morning, everyone, and thank you for joining us today. I'm pleased to share with you some of the strong highlights from this quarter, as well as to provide an update on our strategic outlook. Our second quarter results reflect the dedication, resiliency, and consistency of our team here at U.S. Energy. We achieved net daily production of just under 2,000 barrels of oil equivalent per day, marking a 10% increase over the same quarter in 2022. Notably, our oil production accounted for 64% of our total production. I'm particularly proud to highlight our substantial achievements in cost management. Our lease operating expenses came in at $3.9 million, or $21.75 per BOE, representing a significant 17% and 24% reduction, respectively, compared to the second quarter of 2022. This impressive reduction underscores our commitment to operational efficiency and was achieved against the continued backdrop of increased rates, which flows through to everything, including elevated service costs. We continue to believe that U.S. Energy Corp stands out from other oil and gas producing microcap companies in this backdrop of both improving industry dynamics and a stronger macro pricing outlook. Our current assets require minimal capital to maintain a steady production profile, leading to predictable cash flow and allowing us to effectively allocate dollars to maximize our returns on capital. Our approach also allows us to weather market fluctuations and capitalize on opportunities. making us well-prepared to navigate the evolving energy landscape. Our focus at U.S. Energy remains clear, operational efficiency, balance sheet discipline, and responsible resource management, all of which underscores our commitment to drive sustainable value creation. As we move forward, we remain dedicated to capitalizing on these favorable market conditions and leveraging our strengths to deliver continued growth and shareholder returns. In the further adoption of these initiatives, during the second quarter, we bolstered our shareholder returns program through the initiation of our $5 million share repurchase program. While we only began the repurchase program mid-quarter, we repurchased greater than one-half of 1% of our outstanding shares and are pleased with the share response that we witnessed in the market. Ultimately, our mandate is to allocate capital to our highest return projects that generate the most positive results, and our shareholder returns program is no different. To that end, I'm pleased to announce we plan to accelerate our share repurchase program by reallocating capital through the halting of the company's dividend to the acceleration of our repurchase program and continued debt repayment. The consistent and steady repurchase of the company's shares at current valuation levels is as high of a return opportunity as I see in the marketplace and something we will continue to pursue. In summary, the second quarter was exceptional in terms of production, cost control, and positive results of capital allocation decisions that were made earlier in the year. These achievements set the stage for our growth initiatives while positioning us to take advantage of increased commodity prices that will help generate steady high margin cash flow. Our capital allocation strategy emphasizes maintaining an attractive leverage profile, opportunistically repurchasing our common stock, and our continued commitment to utilizing our equity capital efficiently. Our goal remains to continue expanding our scale to the acquisition of assets that align with our core operating areas. By increasing our scale and bolstered by our shareholder return initiatives, we believe we can unlock greater equity returns for all of our shareholders. Now, I would like to introduce Mark Zajac, our new Chief Financial Officer, who will provide a detailed update on the financial results for the second quarter. Mark brings to our team many years of leadership experience in energy and finance, primarily as a partner at KPMG, and has been a wonderful addition to our team. With that, I'll turn it over to Mark.