Intrepid Potash, Inc

Thank you for standing by. This is the conference operator. Welcome to the Intrepid Potash third quarter 2020 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Matt Preston, Vice President of Finance. Please go ahead, sir.

Thanks, Claudia, and good morning, everyone. Thanks for joining us to discuss Intrepid's third quarter 2020 results. With me on the call today is Intrepid's co-founder, executive chairman, president, and CEO, Bob Dronavis. Also available to answer questions during the Q&A session following our prepared remarks will be our Chief Operating Officer, Brian Stone. Please be advised that our remarks today, including answers to your questions, include forward-looking statements as defined by U.S. securities laws. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those currently anticipated. These statements are based on the information available to us today, and we assume no obligation to update them. These risks and uncertainties are described in our periodic reports filed with the Securities and Exchange Commission, which are incorporated here by reference. During today's call, we will refer to certain non-GAAP financial and operational measures. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures are included in yesterday's press release. Our SEC filings and press releases are available on our website at intrepidpodash.com. I'll now turn the call over to Bob.

Thanks, Matt, and good morning to everyone. We managed well through another quarter of uncertainty and volatility and are seeing positive trends in both fertilizer and oil field markets. We worked with the various states and their agencies to maintain our essential business status so that we could continue to operate. As we emerge from the bottom of a down cycle in fertilizer and start to produce off a great 2020 summer evaporation year, We see numerous positives in front of Intrepid. Oil field activity is increasing, water sales are improving, and the water market is tightening. And the outlook looks supremely good for 2021. Lawsuits are behind us, weak partners are getting out of the way, and we're teaming up with a strong set of financial partners to embrace, transform, and truly grow into 2021. 2020 has been and remains a unique year regardless of the pandemic. Over the past nine months, we decreased our overall debt by $15 million, which will increase to $25 million when we receive forgiveness of our PPP loan. We settled outstanding litigation and continued preparation for the eventual resolution of our Pecos water dispute we incurred legal costs significantly above any normal level. These expenses and cash outflows were clearly one-time events. Over the past couple of quarters, our earnings have certainly been pressured by the COVID-19 pandemic and decreased fertilizer pricing. But when we look at our debt compared to our asset base and our cash flow potential, we see a lot of upside potential for Intrepid. As with any downturn, And as you may be aware, there have been numerous in my decades of commodity experience. These are the opportunities to strengthen and diversify your business if you're willing to be quick-thinking and adjust with an ever-changing landscape and maintain a creative, optimistic culture. Companies that keep their eyes up instead of hunkering down can be rewarded, and that is exactly what we have done as we continue to expand our relationships in the Delaware Basin with strategic partners. We are thoroughly engaged with our strategic partner select, several oil and gas operators, and a couple of midstream companies to become a powerhouse in the smart use and development of the environmentally friendly methods to utilize water, then reuse it, and finally to innovate creative management systems to beneficially use oil and gas-related water. Intrepid has a laser-like focus on smart or full cycle water management. We ask you to follow us closely as we lead the way. Our second quarter investment in the Von Gotten Laboratories is also yielding great data on the benefit of using potash, or KCL as it's known in the oil field, in certain formations, and we hope to improve our industrial potash sales significantly as drilling and fracking activity increases in future periods in very specific areas. Our nutrient businesses ended the third quarter on a positive note, as domestic potash inventories have leveled out over the past few months, which should set us up for a good end of the year and heading into the next spring season. The post-summer fill price increase has stuck And just last week, we announced an additional $15 to $20 increase, bringing our posted price up to $30 to $35 per ton from the summer fill price levels and clearly calling a bottom to the potash market. This is welcome news for the market that has struggled to find its footing over the past year and a great start to the fourth quarter as our potash production ramps up after an above-average 2020 summer evaporation season. For TRIO, we continue to maintain consistent production levels the prior years as we balance existing inventory and focus sales efforts on growing domestic volume. Similar to potash, the summer fill price has been accepted. We announced an additional $10 per ton increase last week, effective immediately. During the third quarter, we continue to position ourselves to capitalize from the return of oilfield activity in the Delaware Basin, moving most of our transfer equipment off of generators and onto the power grid, which will continue to improve our transfer expenses going forward. Our approach to the oilfield markets today remains pragmatic, with a focus on establishing long-term relationships with operators as dependable water suppliers in the Delaware Basin that can meet the incredible demand of water delivery in a frac, and they require increasingly larger volumes of water per completion at increasingly larger flow rates. We are surrounded by well-capitalized and long-term focused operators with attractive break-even drilling economics. Many of these operators have continued to operate albeit at reduced rates through the downturn and are indicating plans to ramp up considerably in 2021. We acknowledge the next couple of quarters could be bumpy due to an uncertain trajectory for the COVID-19 pandemic, but the rebound in the Delaware Basin is happening as we speak. As I said last quarter, these pressures are inherently time bound and the attention that companies are focusing in the Permian and specifically the Northern Delaware gives us a lot of optimism about the future. To that end, as I stated in the beginning of my comments, we have used the past six months to not just focus on improving our existing business, but to find opportunities to participate in the upside of improving oilfield demand as we remain convinced of the value and potential of smart or full-cycle water management in the Delaware Basin. And now I'll turn the call over to Matt for review of our financial results and outlook.