CorEnergy Infrastructure Trust, Inc.

Hello, and welcome to Core Energy's conference call to discuss the fourth quarter and full year 2021 results. At this time, all participants have been placed on a listen-only mode, and we will open the floor for questions and comments after the presentation. If you do have any questions or comments, you may press star 1 on your phone at any time to join the queue. I would now like to turn the call over to Matt Kreps, Investor Relations for Core Energy. Please go ahead.

Thank you, Kate, and thank you, everyone, for joining today's Core Energy Infrastructure Trust conference call. With me today are Dave Schulte, CEO, John Greer, COO, and Robert Waldron, CFO. Earlier this morning, we published a press release announcing the fourth quarter and full year results for 2021. We expect to file a Form 10-K this afternoon. You can also access a webcast replay of this call on the Investors section of the company website at coreenergy.reit. typically available within a couple hours of the live call's end. I'd like to remind everyone that the statements made during the course of this presentation that are not purely historical may be forward-looking statements and are subject to the safe harbor protection under the applicable securities laws. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in our findings with the SEC. These documents are available in the investor relations section of our website. We do not update our forward-looking statements. Also, during this call, we will make reference to certain forward-looking non-GAAP metrics, which will be reconciled with subsequent filings as part of our results reporting. We encourage all of you to review our complete disclosures, risk factors, GAAP numbers, and those non-GAAP metrics with the related reconciliations. And with that, I would like to now turn the call over to Dave Schulte. Please go ahead.

Good morning, everyone. We're happy to talk with you this morning about our results and our outlook. In 2021, Core Energy overcame the pandemic-related challenges of 2020, and we believe we're now positioned for the future. We transitioned from a lease-centric business to an owner-operator model under our industry-leading private letter ruling that enables us to recognize certain operating activities as good rents within our restructure. We also reorganized our operations reduced cost, and strengthened dividend coverage, all to the benefit of our common holders going into 2022. This includes the reduction in management fees and simplification of the capital structure, both of which followed stockholder approval. The net takeaway of these actions should be that while our common stock was already in a good dividend position, these steps provide even greater confidence of coverage for our common holders, with subordinated management-owned shares acting as a shock absorber if necessary. This is also an indication of the confidence your management team has in the future of our platform. We believe we've achieved great alignment of management performance with our stockholders. Fourth quarter revenue was $35.8 million. MoGas and Omega were steady performers, while our Crimson California business demonstrated that it has established a post-COVID volume baseline and the benefits of our ability to implement rate increases when needed. Our assets now primarily generate revenue based on a cost-of-service model, where over time the impact of any long-term volume declines are mitigated by tariff rate increases. This secures a stable model for core energy and supports our ability to cover our dividends while providing opportunities for modest long-term growth ahead. Looking at California in a little more detail, California is an energy island when it comes to oil. Since there are no interstate pipelines that carry crude from the other lower 48 states, into the state. Therefore, every barrel of oil that Californians consume that is not produced in the state must be brought in on ships or rail at a far higher carbon cost versus our pipelines, with a significant percentage coming from foreign countries. Despite high oil prices and the signal that sends to producers, last October, a court ruled that Kern County may not issue new drilling permits under its existing environmental impact report until a legal challenge to that EIR is ruled on by a court, requiring any new permits to be issued by the state, which has slowed issuance significantly. The hearing on the EIR challenge is scheduled to occur next month in April, and though there are no guarantees, we're optimistic permits will begin being issued by the county soon thereafter. Additionally, for the past couple of years, producers have focused on using free cash flows pay down their debt and invest in energy transition or carbon mitigation programs in place of drilling resulting in higher than historical decline rates but recently they've expressed their desire to increase production should permits permitting issues be resolved we do see other opportunities ahead including the return of the offshore production volumes curtailed late last year due to an underwater pipeline break in a third-party system was not owned by the company We expect those production resources will be back online and feeding into our system in the fall. Prior to that break, those accounted for about 1.2 million barrels of annual volume, and it will represent a sizable boost to our cash flows, which were previously reported at approximately $98,000 per month. We're also encouraged by quarterly updates from Phillips 66 that their Rodeo refinery will convert to renewable diesel by 2024 and will no longer process crude oil. Those crude volumes are expected to continue to be produced, but will need a path to different refineries, such as the Crimson Pipelines provide, among other possible routes. Turning to our assets in the Midwest, MoGas and Omega systems continue performing steadily. We're delivering increased volumes and supporting the efforts of our customers, Spire and St. Louis, which is a critical provider of natural gas to customers in that area. The consistency and predictability of these assets are reflective of our long-term goals across the asset base. With that, I'll turn it over to Robert to address the financials and introduce our new ESG report. That report was supported by our senior leadership and board of directors, and the results demonstrate exemplary stewardship of capital and consideration for our stakeholders. Robert?