Aris Water Solutions, Inc.

Greetings and welcome to the ARIS Water Solutions first quarter 2022 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Turf, Senior Vice President of Finance and Investor Relations. Please go ahead.

Good morning and welcome to the Aris Water Solutions First Quarter 2022 Earnings Conference Call. I am joined today by our President and CEO, Amanda Brock, our Founder and Executive Chairman, Bill Zartler, and our CFO, Brenda Schroer. Before we begin, I'd like to remind you that in this call and the related presentation, we will make forward-looking statements regarding our current beliefs, plans, and expectations, which are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties and other factors that could cause our actual results to differ materially from results and events contemplated by such forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements. Please refer to the risk factors included in our quarterly report on Form 10-Q and annual report on Form 10-K filed with the Securities and Exchange Commission. I would also like to point out that our investor presentation in today's conference call will contain discussion of non-GAAP financial measures, which we believe are useful in evaluating our performance. These supplemental measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with U.S. GAAP. Reconciliations to the most directly comparable GAAP measures are included in our earnings release and the appendix of today's accompanying presentation. I'll now turn the call over to our President and CEO, Amanda Brock.

Thank you, David, and thanks to everybody for joining us this morning. Eris Water had a strong first quarter, growing our total water volumes to approximately 1.2 million barrels per day and adjusted EBITDA to approximately $36 million, up 45% and 54% versus the first quarter of 2021, respectively. Activity levels in the New Mexico-Delaware Basin continue to increase, and we saw significant growth in the use of recycled produced water by our customers, increasing recycling volumes nearly four times versus the first quarter of last year. Basin activity and recycled water demand are supporting the continued growth of our full cycle water management business. As mentioned in our press release yesterday, we're excited to announce the signing of a new comprehensive full cycle water management agreement with Chevron, which significantly expands our existing relationship. Under this long-term agreement, ARIS will provide Chevron with extensive produced water handling and recycling services across a large portion of Chevron's core acreage in the Delaware Basin, including acreage in Eddy and Lee counties in New Mexico and Culberson and Reeves counties in Texas. The agreement will also facilitate Chevron's increased use of recycled water in their operations and will reduce their use of groundwater, improving their water sustainability footprint. The new agreement also increases our scale and further strengthens and expands our dedicated acreage position. We want to highlight that this new agreement results from our demonstrated track record of performance with Chevron and represents a meaningful endorsement of our capabilities and our team. Brenda will talk in more detail about the financial impact of this agreement. Additionally, earlier in the first quarter, we announced our expanded alliance with Texas Pacific Land Corporation. Importantly, ARIS now has expanded access across Texas Pacific's northern Delaware surface acreage in Texas to provide a full suite of produced water services, including incremental water recycling for two large leading customers. We also received key additional shallow interval water handling locations, as well as the option to permit additional locations that will allow us to expand our system efficiently and as needed over time alongside the growth of our customers. I would also like to provide a brief update on seismicity issues in the Permian Basin. Again this quarter, we've had no material volumetric or revenue curtailment associated with seismic response area restrictions. We continue to monitor seismic impacts on the industry and are working closely alongside regulators, academic institutions, and our customers to research, pilot, adapt applicable technologies, and implement long-term solutions for the beneficial reuse of produced water, which along with other solutions may have a mitigating impact on seismicity over time. With that, I'll turn it over to Brenda to discuss our financial results for the quarter.