Intrepid Potash, Inc

Thank you for standing by. This is the conference operator. Welcome to the Intrepid Potash, Inc. Q4 and year-end 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 1 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.

Thanks, Charisse, and good morning, everyone. Thanks for joining us to discuss Intrepid's fourth quarter 2020 results. With me on the call today is Intrepid's co-founder, executive chairman, president, and CEO, Bob Gernobis. Also available to answer questions during the Q&A session following our prepared remarks will be our Chief Operating Officer, Brian Stone, and our Vice President of Sales and Marketing, Zachary Adams. 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 SEC, which are incorporated here by reference. During today's call, we will refer to certain non-GAAP financial and operational measures. Reconciliations 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.

Thank you, Matt, and good morning, everyone. Solid cash flow and EBITDA highlighted our fourth quarter and put a positive end on a unique year. The encouraging trends we saw emerging in the fourth quarter are continuing into spring as commodity markets show strength across both our fertilizer and oil field segments. The last couple of months, We have seen gradual yet sustained improvements in our ability to combat the COVID-19 pandemic, and we are optimistic that the good news will continue as cities begin to relax restrictions now that significant portions of our most vulnerable populations are protected. We wish the world well. Our nutrient business ended the year with significant momentum and hasn't slowed down in the first quarter. We called a bottom in the potash market on our November earnings call, and recent pricing and demand has exceeded our expectations. We announced another potash price increase in February of $50 per ton, increasing our posted potash prices $140 per ton above summer fill levels. TRIO has also seen strong demand and is currently posted $60 per ton higher than the summer fill values. Customers have been eager to secure product as prices continue to move up, and have locked in some volumes through second quarter with additional spot buying occurring throughout the spring and farmers who are eager to replenish nutrients at today's crop prices. Strong commodity pricing in soybeans, corn, wheat, palm oil, sugar, cotton, and bottoms in the cocoa market and the coffee market, all in strength to a continuing global demand. During the fourth quarter, we continued to position ourselves to capitalize on the return of the oil field demand in the Delaware Basin, leading ESG initiatives with a clear emphasis on full cycle water management. Full cycle water management means minimizing traditional source water use and produced water disposal with environmentally friendly treated produced water recycling. With environmental and sustainability goals front and center for so many oil and gas management teams, regulatory bodies, and governments, the need for responsible and innovative use and reuse of water is the key to capturing the full potential of the Delaware Basin. Intrepid is uniquely positioned with its variety of assets and water rights in Southeast New Mexico to become a leader in the space, touching every aspect of the market from fresh and brine water delivery to recycled and produced water handling and disposal. We're in the early stages of construction of a produced water disposal system adjacent to our south ranch and should have our first produced water well drilled in the first half of this year. As we finalize our capital plans, we're also working on minimum volume commitments with operators that will provide a solid base of demand to support our investments. We expect the produced water well will cost approximately two million bucks and we'll complete incremental capital for the surface facility at the appropriate time. Total capital for our first well and surface facilities is estimated at $7 million. We expect additional wells can be added as demand and volume commitments require at a cost of approximately $2 million each. In addition to produced water, we're investing in recycling infrastructure and expanding our capabilities to deliver the services and products necessary to operate in an increasingly ESG-focused environment. We are currently in talks with multiple companies about partnering in new and exciting areas of oilfield and full cycle water management business that will leverage our unique position and inherit optionality of our intrepid freshwater and brinewater assets across the Northern Delaware Basin. The Northern Delaware is full of long-term, focused, well-capitalized operators and we're seeing many of these operators revisit their expectations for 2021 as oil prices have improved significantly in recent months. Fract demand is increasing and source water demands per completion are higher than ever. During the first quarter, we sourced water from third parties at positive margins to supplement our own water rights and existing infrastructure to meet the increasing volume requirements of operators. Our strong relationships with those operators and our ability to meet significant refresh rates sets us apart from many other source water providers in the Delaware basin. The next few quarters are pivotal for Intrepid as we will execute on our strategy to expand our oil and gas midstream business in the Delaware basin and tap into the significant opportunity that full cycle water management offers. Proper water management and the ability to provide operators with a single source capable of meeting both their operating and ESG goals will be essential in unlocking the potential value of this business over the coming months. And now I'll turn the call over to Matt for a review of the financial results and outlook.