Black Stone Minerals LP

Good day, everyone, and welcome to today's Blackstone Minerals fourth quarter and earnings release conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your touchtone phone. You may withdraw yourself from the queue by pressing star and two. Please note, this call may be recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Senior Vice President and General Counsel Steve Putman.

Thank you. Good morning to everyone. Thank you for joining us either by phone or online for Blackstone's fourth quarter and full year 2022 earnings conference call. Today's call has been recorded and will be available on our website along with the earnings release, which was issued last night. Before we start, I'd like to advise you that we will be making forward-looking statements during this call about our plans, expectations, and assumptions regarding our future performance. These statements involve risks that may cause our actual results to differ materially from the results expressed or implied in our forward-looking statements. For discussion of these risks, you should refer to our cautionary information about forward-looking statements in our press release from yesterday and the risk factor section of our 2022 10-K that we expect to file later today. We may refer to certain non-GAAP financial measures that we believe are useful in evaluating our performance. Reconciliation of those measures to the most directly comparable GAAP measure and other information about these non-GAAP metrics are described in our earnings press release from yesterday, which can be found on our website at blackstoneminerals.com. Joining me on the call from the company are Tom Carter, Chairman and CEO, Kerry Clark, Senior Vice President, Land and Commercial, Evan Kiefer, Vice President of Finance and Investor Relations, Garrett Grameon, Vice President of Engineering and Geology, and Thad Montgomery, Vice President of Land. I'll now turn the call over to Tom.

Thank you, Steve. Good morning to everyone on the call, and thanks for joining us today to discuss our fourth quarter and full year 22 results. We posted a very strong quarter across the board and, in fact, set new records in production and cash flow. We generated total production volumes for the quarter of 42,000 BOE per day, an increase of 5% over our third quarter volumes. That increase was driven by higher royalty volumes, which totaled 40,000 BOE per day, up 7% from the last quarter, and the highest level of royalty production in our history. Oil volumes trended up in the Bakken and the Midland, Delaware plays. While the increase in natural gas volumes primarily came from the Shelby, Trough, Hainesville, Bossier position, where our operating partner, ATON, has four rigs on location and where we had a large contribution from overrides associated with our farmed-out working interests in the play. These overrides contributed 2.8 thousand VOE per day of volumes in the quarter that cover multiple months of production. We also saw a step up in volume from our Austin Chalk Acreage. Both of these are strong examples of the potential in our organic growth efforts where we attract operators onto our existing concentrated acreage positions through creative incentive structures and maximize the value of our retained interest through farm outs with third party capital providers. Today, 14 wells have been turned to sales in the Shelby Trough under our development agreement with Athon. And another 16 are in various stages of drilling or completion. In addition, 18 new generation multi-stage completion wells have been turned to sales in our concentrated acreage position in the East Texas Austin Chalk. The goal is to accelerate production where it matters the most while shielding Blackstone from any meaningful capital requirements That strategy paid dividends in the fourth quarter, and we expect that to continue into future years as well. Our record results came against a healthy overall environment for our producers. Realized prices for the fourth quarter were approximately $85 a barrel and $6.50 per mm BTU for gas. both down relative in the last couple of quarters, but clearly high enough to encourage continued development activity. We had 108 rigs operating across our acreage at December 31st. That's an increase of 17% relative to where we were at the end of the third quarter, and it's 14% higher than we saw at the end of 21. Since 2020, we've averaged 10 to 15% of the active rigs in the lower 48 on our acreage. and with our organic initiatives, continue working on attracting more capital and development activity going forward. The record royalty volumes and favorable commodity price environment combine to generate the highest single quarter cash flow for Blackstone Minerals as a public company. We reported adjusted EBITDA of $131 million in distributable cash flow of 125 million for the fourth quarter, both up seven to eight percent from the third quarter. Most importantly, these record results and our confidence in our outlook for 2023 led to the fifth consecutive distribution increase with fourth quarter distributions of 47.5 cents per unit that we announced earlier this month. This also establishes a new high watermark for Blackstone. Overall, it was a great quarter and we have a lot of positive momentum going into 2023. I'm sure many of you saw our announcement last week that Jeff Wood is stepping down as president and chief financial officer effective next week. We really appreciate Jeff's contribution to Blackstone over his six years with us and we sure wish him the best in his future endeavors. Evan Kiefer, who has been at Blackstone for nine years and currently serves as VP of Finance and Investor Relations, will step into the CFO role. We're fortunate to have Evan and his expertise and deep knowledge of the company, and I'm very confident the CFO transition will be seamless. With that, I'll turn it over to Evan to walk through the details of the quarter and discuss our 2023 guidance. Perfect.