Brigham Minerals, Inc. Class A

Hello everyone and welcome to the Brigham Minerals second quarter 2021 earnings conference call. My name is Seb and I'll be your operator for the call today. If you wish to submit a question, you can do so by pressing star 1 on your telephone keypad. If you wish to withdraw your question, please press star 2. I will now hand over to Jacob Sexton, Manager of Finance and Investor Relations.

Thank you, Operator, and good morning, everyone. Welcome to the Brigham Minerals Second 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. We have a new investor presentation titled Second Quarter 2021 Investor Presentation 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 like to now turn the call over to Bud Brigham, founder and executive chairman.

Thank you, Jacob. We appreciate everyone joining us this morning for our second quarter 2021 earnings conference call. The second quarter represented Brigham Minerals' two-year anniversary as a publicly traded company. I'm extremely proud of all that the team has accomplished. especially in the face of an extremely challenging 2020, which we all know too well was significantly impacted by both COVID-19 and the OPEC Plus production dispute. As I look ahead to the remainder of 2021 and into 2022, Brigham Minerals has set up extremely well in three important respects. First, with strong activity wells, in terms of quantity and operator quality in inventory as of June 30th to drive up production results for the upcoming 12 months. Second, with a sound balance sheet that will allow us to continue to acquire minerals in a highly disciplined manner, targeting drilling units with activity wells to further enhance production. And third, very importantly, it's in what looks to be an extremely conducive macro environment for commodities. In fact, this is the best macro setup I've seen in my career, and I've lived through numerous cycles. Benefiting from our diversified portfolio of high-quality mineral assets, our shareholders are positioned to benefit from what I believe is very likely a long ramp of elevated pricing for oil, NGL, and natural gas prices. This is particularly true given that, unlike some of our peers, we are unhedged. In terms of the overall energy industry, we are pleased to see that more in industry are acknowledging the importance of return of capital to shareholders. Since the onset of COVID and the OPEC Plus dispute, companies across the energy space have responded by paying down debt as well as implementing dividends and share buybacks. Obviously, at Brigham, commencing with our IPO, we've returned capital to shareholders consistently over the past two years, and in total had returned $2.72 to our shareholders via our nine dividends, inclusive of the dividend announced last night. We were even able to distribute our dividend during the most challenging of times, the second quarter of 2020, when many companies in the energy space were just trying to stay afloat, much less return capital. It's our business model and conservative balance sheet that allowed us to continue to pay our dividend and make high-quality acquisitions. To emphasize how strongly we feel about the soundness of our business model and continued ability to pay our dividend through any cycle, we are implementing a base plus variable dividend structure with a base dividend of 14 cents per share this quarter or 56 cents per share per year. The 14 cents per share is what we were able to pay our shareholders during the very challenging second quarter of 2020. And we are firmly committed to paying that dividend going forward. Further, this quarter we are paying a variable dividend of 21 cents per share, which results in an overall dividend of 35 cents per share. This represents a 9% sequential increase in our total dividend from the first quarter of 2021. Rob and Blake will cover our base plus variable dividend in more detail, but suffice it to say that our base dividend represents a step change to other base dividends in the same way our 100% variable dividend was well ahead of the broader energy industry's push for return of capital. Consolidation has also been at the forefront of the industry over the past several quarters. Our portfolio has benefited as bigger and better capitalized operators have taken over operatorship of our minerals to enable more consistent and disciplined development. Our focus on the highest rate of return undeveloped locations throughout our history ensures that our mineral position migrates to the top of any operator's drilling inventory. And as a result, we saw a 16% increase in gross and a 31% increase in net wells spent on our minerals during the second quarter. I believe we will also see consolidation in the mineral space over time. No company is in a better position in the mineral space than Brigham to capitalize given our multi-basin portfolio that gives us a unique ability to pursue a wide range of mineral packages. That said, We will remain disciplined in our processes and will ensure that any deal we enter into is accretive from both a cash flow and an NAV perspective. With that, I will turn the call over to Rob.