Granite Ridge Resources, Inc.

I will now turn the call over to Wes Harris, Investor Relations.

Thank you, Operator, and good morning, everyone. We appreciate your interest in Granite Ridge Resources. We will begin our call with comments from Brandon Berg, our President and Chief Executive Officer, who will provide an overview of key matters for the first quarter in an outlook for 2024. We will then turn the call over to Tyler Farkerson, our Chief Financial Officer, who will review our financial results. Luke will then return to provide some closing comments before we open the call up 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 in our filings with the Securities and Exchange Commission. 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 conference call is being recorded. A replay and a transcript will be made available on our website following today's call. So with that, I'll turn the call over to Luke. Luke?

Thank you, Wes, and appreciate everyone joining this call. It seems like we just did this, but I'm always glad to have an opportunity to share an update on the Granite Ridge story. The first quarter built on our track record of workmanlike quarters, nothing flashy, just continued solid execution. Today, I'd like to talk about some of our accomplishments, things to look forward to, and share a bit more about what our strategic partnership initiative looks like as we continue to bridge the gap between operated and non-op. I'll start with the credit side. We announced last month that we successfully expanded our credit facility to both a $300 million borrowing base and elected commitment. The bigger story is that we were successful in fully syndicating the facility, taking it from six to 14 banks. Commitments came in nearly two times our target, and with the financial strength and capacity of our partners, we believe we can triple our credit facility within this group. Now, this expansion does not change our views on leverage. We still target net debt to EBITDA, of 0.5x and expect that will balance between about a third turn and two-thirds of a turn. To put round numbers to that, based on about $300 million of trailing EBITDA, I expect we will balance between $100 million to $200 million of net debt and average around $150 million or less. I want to extend a heartfelt thank you to our existing banking relationships for your support, and I'm excited to welcome our new banking partners. I'll now briefly hit on VITAL. As I mentioned last quarter, we received 1.1 million shares of BTLE, about 50-50 common and preferred, when we sold certain Permian assets to Vital as part of a tag right we had on Vital's acquisition of assets from Henry Resources. This was a compelling opportunity to sell production at an operator premium, and we will look to exit this position in an orderly fashion this year and pay down debt to ultimately recycle the proceeds into development opportunities. Now let's talk about results. Tyler will get into the details, but I'd like to hit on the results as compared to our expectations, as well as what we are looking at for the coming quarters. Production came in slightly higher than expected at 23.8 thousand barrels of oil equivalent per day. That was down 8% from last quarter's reported, compared with an expected 10% decline. Now both of those are unadjusted for the sale to vital. Adjusted numbers, or as Tyler likes to call it, same store sales, are down 3% compared to an expected 5%. Primary drivers for the BEAT, albeit minor, are a bit of outperformance on the oil side, offset by deferrals on the gas side. That is a theme we expect more of, as some of our operating partners have elected to defer dry gas production in this price environment, specifically in the Hainesville and Dry Gas Eagleford. This may impact our gas production for the year, but we have opportunities in the works to reallocate that capital to oil-weighted projects expected to come online this year. We will keep you in the loop on that as the year progresses. We turned in adjusted EBITDAX of $64 million, which was a bit higher than expected, due to help on both oil prices and production. On the deal front, we closed four transactions during the quarter, all were in the Permian and the vast majority on the Delaware side. Total entry, including carries, was $6.8 million for 2.5 net locations. That equates to $2.7 million per net location, which is a bit higher than our target of closer to $2 million. But note, not all net locations are created equal in terms of both quality and development timing. All 2.5 of these net locations have either been turned to sales or are in process, including a 1.4 net well pad that we are drilling through our controlled capital strategy. Additionally, We have nine deals that have either closed since quarter end or are fully agreed to and in the documentation stage with an aggregate entry including carries of $20 million across 10 and a half net locations. While each of these transactions are accounted for in our acquisitions guidance number, I would note that not all $20 million will hit in 2024 as some of those carry dollars will go out the door in subsequent years. On the production side, I mentioned in March that we expected to see a ramp beginning in the third quarter. The deferral of some dry gas production that we had expected to come online in the second quarter, which we were happy about, by the way, will likely slow down that timeline. We now expect production to be roughly flat for the next couple of quarters prior to a ramp in the fourth. On the CapEx side, the second quarter should be roughly a quarter of our DNC CapEx for the year. but it is setting up to be our largest quarter of acquisitions for the year. It can be tough to tell if a deal will close on June 30th or July 1st, but based on deals closed quarter to date and those expected to close in the next two months, we are looking at about 75% of 2024 acquisition CapEx hitting in the second quarter. Note, this number includes both cash paid in the quarter and carry dollars that hit in the quarter. I'll wrap up by talking a little more about our strategic partnership strategy. We define a strategic partnership as more than just a deal. In other words, a partnership that gives Granite Ridge access to broader deal flow or more control over development timing. Ideally, it is both, or what we call controlled capital. With controlled capital, our deal flow broadens to include operated opportunities where we have control, specifically development timing. Controlled capital not only represents operated inventory that we can develop with a strategic partner, it opens the door to a broader set of asset buyers as we can sell drilling units to operators looking to add inventory. Operated inventory trades at a premium and will allow us to further build the case that Granite Ridge is undervalued from both a business and some of the parts valued. To put some numbers to this, Granite Ridge controls inventory of 40 gross or 21.9 net operated locations in the Permian. In Loving County, we plan to turn to sales a pad of 5.5 net single-mile wells early next month and a second pad of 1.4 net single-mile wells late in the third quarter. We are currently running one rig through a strategic partner and plan to pick up a second later this year. Traditional non-op is the cornerstone of the Granite Ridge Foundation, but controlled CapEx is where we are going. While we now expect controlled CapEx to be upwards of 40% of our 2024 D&C, our goal is for a super majority of our capital to be controlled in the next several years. We're bridging the gap between operated and non-operated by demonstrating that non-op does not mean non-control. With that, I'll ask Tyler to dive a bit deeper into the numbers.