Brigham Minerals, Inc. Class A

Good day and welcome to the Brigham Minerals First Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please see your conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask your question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Jacob Sexton. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to the Brigham Minerals first quarter 2021 earnings conference call. Joining us today are Bud Brigham, founder and executive chairman, Rob Rosa, founder and chief executive officer, and Blake Williams, chief financial officer. Before we begin, I would like to remind you that our remarks, including the answers to your questions, contain forward-looking statements, and we refer you to our earnings release for a detailed discussion of these forward-looking statements and the associated risks. In addition, during this call, we make references to certain non-GAAP financial measures. Reconciliations to applicable GAAP measures can be found in our earnings release and our investor presentation. Our investor presentation is titled First Quarter 2021 Investor Presentation and is available for download on our website, www.brighamminerals.com. We recommend downloading the presentation in the event we refer to it during the conference call. Lastly, as a reminder, today's call is being webcast and is accessible through the audio link on our IR website. I would now like to turn the call over to Bud Brigham, founder and executive chairman.

Thank you, Jacob. We appreciate everyone joining us this morning for our first quarter 2021 earnings conference call. Our business continued to deliver outstanding results this quarter, including record total revenues in adjusted EBITDA, which I attribute to our team's disciplined and thoughtful management of our diversified mineral portfolio. Despite a 5% reduction in production volumes due to the impact of winter storm Uri, our total revenues were up 42%. Adjusted EBITDA was up 57%, and we increased our dividend 23% sequentially from the fourth quarter. I will note that the 23% increase in our dividend comes on the heels of further increasing our dividend retention from 10% to 20%. Said differently, we are distributing 80% of our cash this quarter as compared to 90% in the fourth quarter of 2020. It's readily apparent that the minerals business model benefited tremendously from improved pricing, and Brigham Minerals was, in particular, able to pass along the improved macro directly to our shareholders. Our sound balance sheet, which we intend to maintain, benefited us in two important ways. First, we did not need to panic at any point during the rollercoaster year of 2020 and execute hedges, which today are currently serving as strong headwinds to numerous companies in the energy space. Here at Brigham, we are managers of a premier mineral portfolio, not commodity traders, and we prefer to give our investors full exposure to the commodity. Second, since the third quarter of last year, we've continued deploying capital to mineral acquisitions and believe the assets we've acquired over the past three quarters will generate differentiated performance over the next several years. We will continue to employ our disciplined underwriting of deals to enhance shareholder value and at the same time see more of our acquisitions internally funded via retained cash. A related key point that I want to make is that our retained cash and lease bonus funded approximately 30 percent of our first quarter mineral acquisitions. In a similar vein, we have and will continue to monitor the risk of increased federal regulation with respect to our ongoing acquisition efforts. While it appears permits are being issued, there's no doubt that the process has slowed and the increased rhetoric is of concern. As a reminder, however, our current portfolio has less than 5% exposure to federal lands across New Mexico, Oklahoma, the DJ, and North Dakota. And in particular, only 2.5% of our assets on a net royalty acre basis are located in New Mexico in federal units. We therefore currently have minimal exposure to potential federal regulatory changes. Further, when we look at deals in these areas, we're only giving credit to visible and near-term development in federal units. Finally, I'd also like to highlight the continued value of our diversified portfolio, another critical element of our differentiated approach. Our multi-basin asset both reduces the risk to any specific operator or operating basin, while also allowing us to play in a bigger sandbox in terms of mineral acquisitions. We continue to find incredible value in deals in the DJ, Anadarko, and Williston basins, and will opportunistically add to our portfolio in these areas when the economics point towards achieving favorable risk-adjusted returns. Looking ahead, I'm particularly encouraged by our ground game deal flow, and I like the fact that we are internally funding a portion of our deals. The macro setup is extremely positive, and I believe our experienced management team and differentiated strategy will continue to produce outstanding results. With that, I will turn the call over to Rob.