Aris Water Solutions, Inc.

Greetings and welcome to the ARIS Water Solutions Q4 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, David Turf, Senior Vice President of Finance and Investor Relations. Thank you, David. You may begin.

Good morning, and welcome to the ARIS Water Solutions Fourth Quarter 2023 Earnings Conference Call. I am joined today by our President and CEO, Amanda Brock, our Founder and Executive Chairman, Bill Zartler, and our CFO, Stephen Thompson. 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 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 and other cautionary statements included in our filings made from time to time with the Securities and Exchange Commission. I would also like to point out that our investor presentation and 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 gap measures are included in our earnings release and the appendix of today's accompanying presentation. I'll now turn the call over to our founder and executive chairman, Bill Zarver.

Thank you, David. 2023 was a fantastic year for the ARIS business. We focused on fundamental execution, which improved profitability, reduced working capital, and improved our operational flexibility while continuing to grow the business. Volumes were up 16% for the year, and we recaptured margins, which had been eroded by inflation and cost challenges driven by our rapid growth in late 2022. Strategically, we have remained disciplined in our approach to capital allocation, growing organically under long-term contractual agreements while selectively evaluating and closing new agreements in an improving pricing environment. There is greater demand for water infrastructure in the Northern Delaware Basin than there are existing assets. and we have the opportunity to participate in further growth at attractive rates of return. Inorganically, we've maintained similar discipline with a continued focus on strategic fit and accretion across all metrics in both the short and long term. Our conservative balance sheet and ample liquidity give us the flexibility to invest when the timing and economics are most compelling. Looking to 2024, we're excited about the business and our opportunity set. we will benefit from our prior capital investments and anticipate being able to better leverage the system to improve capital efficiency going forward. Combined with continued operational and commercial improvements, we anticipate sustained positive free cash flow for the year, which will improve our options for capital allocation, which can include increasing our shareholder returns. Our team is focused on continuing the strong execution we demonstrated in 2023 operating safely and reliably for our employees and customers while enhancing water sustainability in the Permian Basin. With that, I'll turn it over to Amanda.