Granite Ridge Resources, Inc.

Good morning and welcome everyone to Granite Ridge Resources first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If you would like to ask a question during this time, please press star 1 on your telephone keypad. I will now turn the call over to Wes Harris, Investor Relations Representative for Granite Ridge.

Thank you, operator, and good morning, everyone. We appreciate your interest in grant-rated resources. We will begin our call with comments from Luke Brandenburg, President and Chief Executive Officer, who will provide an overview of key matters for the first quarter and our updated outlook for 2023. We will then turn the call over to Tyler Forkerson, Chief Financial Officer, who will review our financial results. Luke will then return to provide some closing comments before we open up the call for questions. Today's conference call contains certain projections and other forward-looking statements within the meaning of federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ from those expressed or implied in these statements. We would ask that you also review the cautionary statement in our earnings release. Granite Ridge disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Accordingly, you should not place undue reliance on forward-looking statements. These and other risks are described in yesterday's press release and our filings with the SEC. This conference call also includes references to certain non-GAAP financial measures. Information reconciling non-GAAP financial measures discussed to the most directly comparable GAAP financial measures is available in our earnings release that is posted on our website. Finally, as a reminder, this call is being recorded. A replay and transcript will be made available on our website following today's call. With that, I'll turn the call over to Luke. Luke?

Thank you, Wes, and good morning, everyone. We appreciate you joining us for today's call. We're pleased with our results for the first quarter of 2023, which provide us with a solid start to the year. Our success during the period was driven by strong execution on our 2023 business plan, as our team continues to work closely with our proven operating partners in multiple key basins across the country. Highlights for the first quarter include a 5% increase in net production from last quarter to approximately 23,200 barrels of oil equivalent per day, including 46% oil. Revenue of $91 million and net income of $37 million. Adjusted EBITDAX and adjusted net income of $71 million and $27 million, respectively. And liquidity of $136 million, including $11 million of cash at the end of the period. Looking specifically at our production results, on our year-end 2022 earnings call, we discussed that we anticipated a slight production decline of around 5% from the fourth quarter. Driving this view was the expectation that some flush production for 2022 would roll off and that 2023 net turn to sales were weighted towards the back half of the year. Our actual first quarter 23 production results ended up coming in about 10% higher than our projections due to outperformance on some of our newer gas wells and a handful of high-interest wells coming online late in the first quarter versus early in the second. In total, our operating partners turned 78 wells to sales during the first quarter. This equated to 5.9 net wells for Granite Ridge. Of the 78 gross wells, 59% were in the Permian, 17% were in the DJ, 13% were in the Bakken, and 11% were in the Eagleford. During the first quarter, we spent $91 million on drilling a completion CapEx net to Granite Ridge, or said another way, excluding drilling carries. Tyler will provide additional details in his comments, but I will say that DNC CapEx for the quarter came in quite a bit hotter than expected. As I mentioned, much of the delta was due to acceleration of wells scheduled to come online in the second quarter that actually came online in the first, which is great, other than when you're trying to model a company quarterly, that is. The remainder of spending during the quarter included $17 million of opportunity capture. As a reminder, opportunity capture is basically anything that grows our undeveloped inventory. Think acquisitions of undeveloped acreage, leasing, drilling carries, and most of the deals that we target through strategic partnerships. Of that $17 million, 89% was in the Delaware, and 70% of the capital in the Delaware was through a strategic partnership. We also closed on an $18 million DJ PDP package. While we are not typically focused on oil-weighted PDP deals in this price environment, this is a transaction that we have been working on since last March that took a while to get to the finish line. Turning to our outlook for full year 2023, in our continued effort to provide more and better information, we are bifurcating our guidance between opportunity capture slash PDP acquisitions and D&C CapEx. On the D&C CapEx side, we are increasing guidance by $25 million at the midpoint to a range from $230 million to $260 million. About half of that increase is new D&C generated by our burgers and beer game. I would note that we do not anticipate seeing material production from most of the new CapEx until 2024. The other half is a combination of cost inflation from wells that were AFE'd in early to mid-2022 and unforecasted activity. On the inflation side, we believe that we've realized most of that hit in the first quarter. It seems that wells AFE'd in late 2022 and after are coming in around AFE. Finally, we increased our guided net wells by one to a range of 19 to 21. Our view of $45 million for opportunity capture and PDP acquisitions remains unchanged. That includes the $18 million DJ deal and $17 million of opportunity capture year-to-date plus roughly $10 million that we've committed but not yet spent. Our full-year capital spending outlook does not include any dollars for uncommitted acquisitions or opportunity capture, though I note our team continues to pursue new growth opportunities daily. As a result of the stronger-than-anticipated PDP performance we have seen to date in the Permian and Haynesville, and Wells coming online sooner than expected during the first quarter, we're increasing our full year 2023 production outlook by 500 barrels equivalent per day to a range of 21,000 to 23,000 barrels of oil equivalent per day, including 49% oil. So with that, I'll turn it over to Tyler to discuss our financial results in more detail.