Brigham Minerals, Inc. Class A

Good morning and thank you for attending today's Brigham Minerals first quarter 2022 earnings conference call. My name is Sam and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question please press star followed by one on your telephone keypad. This time I'd like to turn the call over to our host Jacob Sexton, Investor Relations. Jacob please proceed.

Thank you, Operator, and good morning, everyone. Welcome to the Brigham Minerals first quarter 2022 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. 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 also be found in our earnings release. We have a new investor presentation titled First Quarter 2022 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 now like to turn the call over to Bud Brigham, Founder and Executive Chairman.

Bud Brigham Thank you, Jacob, and thanks to everyone for joining us on our first quarter 2022 earnings conference call. On both our year-end 2020 and 2021 conference calls, I indicated that companies that are optimally positioned are going to generate substantial returns for shareholders in the current energy super cycle. More specifically, I stated that Brigham Minerals was uniquely positioned to succeed this year, given both our activity well inventory and high-quality undeveloped inventory. Our quarterly results reflect that outperformance. Our team generated record production, revenues, EBITDA, dividends, and drilling activity. The exceptional performance was driven by our incredibly strong duct conversions, which were almost entirely backfilled by our record drilling activity during the quarter. I believe our high-quality activity well inventory will continue to generate outperformance as we look to the remainder of 2022 and into 2023. With respect to the current macro environment, despite the recent COVID concerns in China, I see no fundamental departure from my view that we are in the midst of the early stages of an extended energy supercycle. U.S. shale is still moderating production growth, and there are supply chain issues, including a constrained supply of materials, including tubulars and sand, and of course labor is in short supply. We also continue to see the U.S. duck inventory decline, thereby mitigating our industry's ability to quickly ramp up supply. All of these factors and others point to a longer runway of elevated oil and gas prices and strong economic returns. Therefore, companies such as ours that are optimally positioned with premium assets will continue to generate substantial returns for our shareholders. With that, I will turn the call over to Rob.

Thanks, Bud. Our team generated exceptional operating and financial results during the first quarter 2022, including record production, revenues, EBITDA, dividend distributions, and drilling activity. Furthermore, we closed on approximately $44 million in acquisitions during the quarter, deploying almost the entirety of our capital to the Permian Basin, with an emphasis on acquiring in the Midland Basin under Pioneer Natural Resources in Endeavor. Again, an outstanding effort by our team. Our production volumes are an all-time company record 12,031 barrels of oil equivalent per day, growing 31% from the fourth quarter of 2021. Our production growth was driven by a record 2.7 net wells converted from duct to PDP during the quarter. To put this result into context, we converted 2.9 net locations during the entirety of 2021. Further, three of our top four conversions during the quarter occurred on assets that were acquired pre-2020 pointing to the incredible organic horsepower embedded within our diversified mineral portfolio. As a reminder, we have an incremental 13,000-plus gross locations and over 108 net locations in our undeveloped inventory at the end of the first quarter, with approximately 60% of those net locations in the Permian Basin. Importantly, we were able to almost entirely backfill our duct conversions via the record drilling activity on our assets during the first quarter. During the quarter, approximately 238 gross wells and 2.1 net wells were spot on our minerals. The 2.1 net well spot on our assets is also an all-time company record and is significantly higher than at any point during 2019 when 700 horizontal rigs were running across the lower 48. Similar to our conversions, we saw meaningful contributions to our drilling activity from our organic asset portfolio. During the quarter, approximately two-thirds of our drilling activity was attributable to assets that were acquired pre-2020. Furthermore, we immediately saw drilling activity by PDC and the DJ Basin under our large acquisition that we closed in the fourth quarter. Overall, a really sound mix of organic development with contributions from recent acquisitions. On the acquisition front, during the first quarter, we deployed approximately $44 million in capital, including closing on our previously announced Midland Basin transaction. Despite a tough ground game acquisition market, which is attributable to strong commodity pricing, our extensive sourcing and streamlined evaluation process has enabled us to continue to source attractive opportunities while maintaining a disciplined underwriting process, which we consider to be of paramount importance regardless of deal size. We are seeing a significant increase in the number of large mineral opportunities come to market. As we've said and approved with our DGA Midland transactions, any large deal needs to check multiple boxes in terms of being accretive to near-term cash flow as well as to net asset value. We will continue to endeavor to prioritize a healthy balance sheet in these transactions. As a reminder, we funded both our DGA Midland Basin transactions with approximately 50% equity as it reduces the burden on our balance sheet to provide significant flexibility with respect to future acquisitions. Looking ahead, our net activity well inventory, which represents the combination of our drilled but uncompleted locations, or ducts, in our permits, was 11.7 net locations at the end of the first quarter. Our net ducts and inventory at the end of the first quarter stayed roughly flat versus the fourth quarter, despite our extremely strong aforementioned duct conversions. We anticipate that PDC, Chevron, Pioneer, Oxy, and Diamondback will convert the majority of our duct inventory. Given both our strong production growth and substantial activity well inventory at the end of the first quarter 2022, we now anticipate our production volumes averaging approximately 12,000 barrels of oil equivalent per day for the remaining nine months of 2022. Relative to Q4's 9,170 barrels of oil equivalent per day, This would represent over a 30% increase in our production volumes for the full year 2022. As a reminder, we plan to formally update guidance in August associated with our Q2 2022 earnings conference call for the next 12 months. Finally, we are extremely pleased to announce a 14% increase in our base dividend from $0.14 to $0.16 and a 42% increase in our variable dividend from $0.31 to $0.44. Of note, we were able to increase our variable dividend 42% while reducing our payout ratio from 80 to 75%. Overall, we were able to increase our dividend by 33% to 60 cents while, again, reducing our payout ratio to 75%. In summary, just a terrific job by our team. I'll now turn the call over to Blake so he can summarize for you our financial performance. Blake.

Thank you, Rob. Our daily production for the quarter was 12,031 barrels of oil equivalent per day, up 31% sequentially, and our oil cut remained at 51% with a significant growth out of the Permian Basin. Our portfolio generated a record royalty revenue of $70 million for the quarter, up 49% sequentially due to a 31% increase in production volumes and 16% improvement in realized pricing. Realized pricing for the quarter came in at $64.64 per barrel of oil equivalent. Individually, realized pricing per barrel of oil was $91.90. Realized natural gas was $5.52 per MCF, and realized NGLs were $40.90 per barrel of NGL. We also collected $1.4 million in lease bonus during the first quarter. Net income for the quarter was $39.1 million. Record adjusted EBITDA for the quarter was $60.7 million, and the adjusted EBITDA excluding lease bonus was $59.2 million, which was up roughly 53% sequentially. On costs, gathering transportation and marketing expenses were $2 million, or $1.85 per VOE. We expect to see the trend of slightly higher GTM to continue, given the current environment and recent operator commentary on the increase in service costs. Severance and abdolorum taxes were $4.3 million, or 6% of mineral and royalty revenue, and in line with historical levels. Cast G&A expense was $4.4 million. Subsequent to the release of our year-end results in February, we announced updates to our executive compensation program, which now includes short-term incentives. We believe this change will increase management's at-risk compensation and further align pay with performance. The change results in roughly $2 million of stock-based compensation moving to cash G&A during the full year 2022. So in that sense, our $13.5 million cash G&A midpoint that we issued in February becomes $15.5 million, and our $9.6 million share-based compensation expense midpoint becomes $7.6 million, with no change to the total cash and stock-based compensation for the year. In fact, on a unit basis, total G&A per BOE decreased 18% this quarter as compared to the fourth quarter, highlighting the scalability of our corporate platform. Moving to our balance sheet, our prudent leverage and liquidity profile provides us with ample dry powder to continue to pursue the highly accretive acquisition opportunities Rob spoke about earlier. We exited the quarter with $6 million of cash and $93 million drawn on our revolving credit facility for net debt of $87 million, which results in leverage of 0.4 times net debt to last quarter annualized adjusted EBITDA. Further, as a result of our spring redetermination, which is expected to be finalized at the end of May, our administrative agent has given us a preliminary indication of an increase in the borrowing base to $300 million, which will add another $70 million of liquidity, bringing the new total to $213 million. Lastly, as Rob already stated, we declared a dividend of $0.60 per share of Class A common stock. This dividend is payable on May 27th to shareholders of record as of May 20th. This represents a 75% payout of our discretionary cash flow excluding lease bonus, which is an incremental 5% reduction from the last several quarters. Going forward, we expect to target a payout at this percentage level with the potential to move up or down 5%, keeping it in a range of 70% to 80%. The retained cash provides incremental liquidity to fund reinvestment in our business and continue to grow our reserves per share. I will now turn the call back over to Rob to wrap things up.

Again, we appreciate you joining our first quarter 2022 conference call. As Bud and I have indicated, Brigham Minerals is uniquely positioned to excel during the remainder of 2022 and into 2023. Operator, I'll now turn the call back over to you to begin the question and answer portion of our conference call.

Thank you, Rob. We'll now begin the question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. And if for any reason you'd like to remove that question, please press star 2. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. Again, to ask a question, it is star one. We'll take our first question from the line of Chris Baker of Credit Suisse. Chris, your line is open.

Hey, good morning, guys. Congrats on a very solid update here. I just want to ask two bigger picture questions since I think the quarter speaks for itself. The first one was, Could you maybe just share your latest thoughts around how we should think about long-term organic growth for the portfolio? You know, like I said, obviously a stellar 1Q and looks like high teens organic growth for the year. But just curious directionally how we should think about Brigham versus, say, Permian Oil or lower 48 volumes. Thanks.

Yeah, no, Chris, great point to bring up. You know, I think the organic development on our portfolio this quarter has been tremendous. Really wanted to highlight that in both the earnings press release as well as the conference call, earlier comments that we made. When you think about our portfolio performing as it did, the record drilling results, really wanted to reiterate to everyone that when you think about the 2.1 net wells that were slugged during the quarter, Roughly two-thirds of those were organically sourced from acquisitions that we had affected prior to 2020. So when you look at some of our bigger drilling units, that encapsulates the Patriot Brickyard unit, the Cowan Fox unit, the Oxie Bonsai unit. So really nice contributions from pre-2020. And so, you know, I would think and hope, just given what we're seeing in the portfolio, that we can replicate kind of that two-thirds, one-thirds organic to potentially more near-term acquisition mix in terms of drilling contributions. Similarly, on the conversion side, when we talked about the record 2.7 net conversions there, you know, I pointed to the fact that three of our four largest acquisitions conversions during the quarter were similarly sourced from pre-2020 acquisitions. And so when you look at those, that was the Chevron RevVX conversion in the Delaware Basin that we acquired in 2016, the ExxonMobil St. John's Delaware Basin unit that we acquired in 2018, and then the Chevron Hey Evelyn unit also in the Delaware Basin that we acquired in 2014. And so, you know, really just to reiterate, there's 13,000 gross organic locations that we have in inventory in roughly 108 net locations, 60% of those are in the Permian Basin. So I think we're going to see solid growth across all of our basins. You know, when you break down the production growth of our asset, we had 20% production growth in the Permian, 100% production growth in the DJ Basin, largely as a result of the acquisition that we completed in the fourth quarter. But, you know, also we had meaningful contributions from the Anadarko Basin and Williston Basin largely a result of organic portfolios. So when you look at the Anadarko, that was up 10%. The Williston Basin was up 12%. So when you look at those basins really not acquiring there, the messaging there was first quarter acquisitions, almost 99% of those were related to in the Permian Basin. So when you think about contributions from these other basins, it's powerful. And so I'm hopeful we'll be able to achieve similar type levels of organic integration in terms of growth into our portfolio going forward.

Great, thanks. And as a follow-up, I just want to touch on the inventory depth. You know, slide five talks about 13 to 18 years of high-quality inventory based on 4Q spuds. I'm just curious if there's a, you know, just sort of ballpark growth CAGR that that would line up with. Is that sort of a high single-digit type number or any, you know, additional context there would be great. Thanks.

Yeah, I think as we've said in the past, we expect our portfolio, given the asset quality, to outperform a basket of the operators. So as these operators continue to put activity back to work and they're in the kind of low to no growth, as you've seen with this quarter, we should outperform that given the quality of the asset and the quality of the operators we have operating across our position.

Yeah, and Chris, one thing to point out on page 16 of the presentation is kind of an in-depth breakdown of that organic inventory that we have to work with going forward. So on the left part of that slide, the gross wells, on the right, the net wells. And again, just to point out, you know, 48% of that inventory is in the Delaware Basin, 11% in the Midland Basin. So you're approaching 60% of our net locations are in the Permian. So really powerful in terms of what the organic portfolio can drive going forward.

Okay, great. So I think, just so I'm clear, the 13 to 18 years of inventory is certainly on a growth trajectory in the single digits. Is that fair?

Yes.

It's not a whole slot scenario.

No, I would not expect that to be the case. You know, when you think about, you know, another data point, think about the drilling activity, Chris, is the fact that, you know, from the end of the year to the end of the first quarter, we actually grew our deck balance, whereas most throughout the United States, the duck balance has continued to decrease. So when you look at our ducks, we grow our ducks roughly from 850 locations to 930 locations, so tremendous growth there, whereas in the United States, overall ducks decreased by about 300 locations. So we're seeing growth in our duck balance relative to an overall drawdown. So that points to you, operators, opportunistically pointing towards development of our organic inventory because it has such high IRR returns.

All right, great. Congrats again on the quarter. Appreciate the answers.

I appreciate you joining. Thank you. Thank you, Chris. Next question is from Kyle May of Capital One. Kyle?

Hi, good morning, everyone. Rob, following up on the last comments you were making, you were able to capitalize on strong well conversions in the first quarter. We continue to hear producers stress capital discipline. So can you share any additional thoughts about where you're seeing higher activity levels and how you think about conversions for the balance of the year?

You know, we are seeing very high conversion levels in the Delaware, Midland Basins, also seeing nice conversions in the Midland Basin, or sorry, the Wilson Basin and the DJ Basins. you know, to point out, you know, to reiterate the conversions, they were across all of our basins. When you think about some of these, they were the, you know, in the Midland Basin, we converted the Pioneer Quattle Rogers unit. We had those lists of organic conversions that I talked about. And then also, I think importantly, in the D.J. Basin, we had a conversion by Chevron in the Independence unit that we just acquired in December. So we're seeing conversions across the board in all of our units. And so, You know, when I think about it, you know, I think we're going to have strong conversions relative to just the generic operators because, you know, our thesis all along, Kyle, has been to target the best rock under the best operators. So if we've done our job, which, you know, obviously I think, you know, if that has played out and you've proven that this quarter, you know we've targeted those operators best that their best rock and so they're going to deploy the rigs which you saw through the increase in our record drilling activity and then they're subsequently going to deploy the fractures to our position and so we saw that uh with the conversions this year so you know on both facets you're seeing us outpace I think the general basket of lower 48 resource plays, and that's really borne out by the 30 plus percent growth in our production volumes in first quarter relative to the fourth quarter. So, you know, as we think about it, we're still seeing nice activity levels as we looked at occurrences in April. So, you know, hence us then looking forward and given the strong net activity well inventory that we have in inventory, roughly the 11.7 net locations at the end of March, us providing guidance for the remaining nine months of the year that we're looking at potentially 12,000 barrels of oil equipment per day of production during the remainder of the year. So really a tremendous result because we are seeing such strong convergence in drilling activity on the assets.

Great. Appreciate that additional color. And maybe looking at the M&A side, you've mentioned the M&A market is a little bit more difficult right now. And in the past, you've talked about the differences based on the transaction size. So just any thoughts more recently about kind of what you're seeing in the current M&A landscape?

Yeah, Kyle, you know, we've talked in the past about bifurcating the market in terms of ground game deals. So those are the 50 to 100 acre deals that we've historically done, roughly probably 2,000 transactions per less far over the life of the company and then the larger deals such as the dj basin deal that we closed in the fourth quarter the midland basin deal that we closed this quarter uh and so when i think about it you know the biggest headwind that we face right now is just crude oil pricing and the fact that uh sellers and the reservation price obviously at 100 approaching 110 per barrel It's made sellers less likely to sell. As I've indicated in the past, our job is to continue to stay in touch with those sellers on the ground game, constantly reaching out more so than ever, letters, calls, et cetera, on the bigger deals, being involved in different processes, reaching out to folks. And so, again, we've streamlined the team such that we can very efficiently prosecute both the smaller ground game deals And the larger deals, because we know that the hit rate or acquisition rate has gone down in the last couple of quarters as it relates to crude oil pricing going. So we've got to be that much more efficient in terms of being able to analyze and evaluate deals. And, you know, what I mentioned in the conference call transcript is, you know, We try to do that, but of utmost importance is just being disciplined in the process and making sure that we're doing deals that are accretive near-term cash flow-wise as well as on an NAB basis, because obviously our job is to create value for shareholders. So that's paramount. And number one goal is to, you know, once these deals come in, that we bid them appropriate such that we're generating returns for shareholders.

Okay, great. Appreciate the time this morning and great quarter, guys.

Yeah, thank you. Appreciate you joining. Thank you, Kyle. The next question is from Jeanine Lai of Barclays.

Jeanine, your line is open. Hi, good morning. This is Kane Cheng for Jeanine Lai, and congrats on CORE. Thank you. So for the first question on the free cash flow priority, you have lower payout ratio from 80% to 75%, and you have 93 million balance on the revolver with a low leverage of 25 times. Going forward, how do you prioritize between mineral acquisitions and net payout?

No, I appreciate the question. So, you know, we pretty clearly messaged throughout time that at the end of the day we'd be in the 75% to 80% payout ratio. We've now, given just the stellar production growth as well as the pricing tailwinds, have reduced that to 75%. You know, now we've indicated that plus or minus 5% around that 75% level. So, basically, we see distributions on an operating cash flow basis between 70% and 80% going forward. And so, you know, I think what that does, it provides quite a bit of flexibility going forward as we think about doing acquisitions going forward because, you know, one important point to make is that that $93 million debt balance is the same as it was at the end of the year. So we were able to execute upon $44 million acquisitions in the first quarter with basically no change to our debt balance because we internally funded those acquisitions by retained cash flow. So I think a lot of what we're trying to build around that range of 70% to 80% is providing optionality to do highly creative transactions. And so like

Yeah, I'd say certainly with oil prices at these levels where 85 cents on the dollar goes straight to the bottom line, we're going to have plenty of flexibility to manage all of our objectives. And we'll continue to prioritize dip pen and balance sheet management as well as the acquisitions. I think you can see evidence of this with our DJ and Midland deals where we use stock as some of the consideration. So we've always said that we'll keep net debt to even down below one and a half times. But I think realistically in this environment, we'll plan to keep it below one times and make sure we've got that added flexibility at all times.

Okay, thanks for the color. And as a follow-up, on the 19 million working capital draw during the quarter, obviously many of the EMP companies that have reported all have some level of that. Can you please share your thoughts on whether you see further working capital halving in the form of increasing accounts receivable for the remainder of the year, or perhaps do you view this as more transitory? Thank you.

Yeah, I think this is just a function of increased production and prices. It's pretty common for us to see this given the slight delay in payment that we experience as a mineral company. Sorry. We usually get data from other sources. So, you know, before we see a check from an operator. So if prices flatten out, we expect this, you know, the growth in AR balance to slow and it'll be more steady state. So it's just when you see differences quarter to quarter in production and prices that this occurs. But it's nothing that we think is a headwind, but, you know, something we expected.

Okay. Thank you.

Thank you for that question. Next question is from Nate Pendleton of Stiefel. Nate, your line is open.

Good morning, and congrats on the strong quarter.

Thanks, Nate. Appreciate it.

For my first question, I want to go back to M&A. Given your diversification and your prior commentary about the strong results from different basins, can you speak to the most attractive basins you're seeing for deals going forward?

Nate, we're seeing attractive deals across the Permian, DJ basins, as well as the Wilson basins. So we're actively working up deals in all of those basins. The key, as I've indicated in the past, is just to be disciplined in the process. So making sure we soundly underwrite these deals from the number of horizons, number of wells per horizon, operator timeline for development. So we're actively working up deals in all these basins. And, you know, I think very opportunistically in the fourth quarter, we're able to add really that really nice $93 million DJ acquisition that's immediately paying results in terms of active conversions and developments. And so, you know, I think that there's deals that will continue to be deals in the DJ Basin that will continue to evaluate. Similarly, there will be deals in the Wolfson Basin that are highly attractive under active operators that will also continue to evaluate. But I would say, you know, probably the preponderance of our time, of our evaluation team's time will be related to Permian Basin deals. There just seems to be a much larger throughput or deal throughput in those basins, both in Delaware and Midland basins. And so we are prosecuting deals there. But, you know, I think... When I look back at the DJ deal, we're able to achieve some highly economic returns there when I think about the near-term cash flow accretion as well as the NAV accretion that we've generated via that deal. So we'll be opportunistic looking at all these basins because I think that there's ample opportunity to generate some significant shareholder value in all of those.

Great. Thanks. And for my follow-up, In Q1, it looked like your lease bonus bounced back quite nicely. Can you provide any insight into the drivers there and how we see the outlook for lease bonuses going forward?

Interestingly, Nate, that was a composition of both Delaware as well as DJ based on these things. So it's just part of what we've talked about in the past. the perpetual option of minerals. You know, you hold these mineral lights into perpetuity. So there's events, you know, even given, you know, the rig count approaching, you know, 620 rigs currently with, you know, TPH currently forecasting it to go to 700, operators can't always hold all the acreage. And so I think, you know, you'll continue to potentially see us generate lease bonus going forward. There's just opportunities there that are always going to present themselves. And that's something that, you know, we actively monitor and engage with operators. And so I'm hopeful, you know, you'll continue to see some upside from us throughout the remainder of 22 in terms of lease bonus. You know, it's just, you know, really one of the pleasant surprises that presents itself with respect to minerals.

Absolutely. Thanks for taking my questions. Thanks for joining.

Thank you, Nate. As a final reminder to ask a question, it is star one on your cell phone keypad. Our next question is from Grant Atkins of Raymond James. Grant, your line is open.

Hi, guys. Congrats on the strong quarter. So where I'm going to start is kind of from a production cadence standpoint. So obviously you've guided to 12th NBOE for the remainder of the year. But is there any, I guess, additional color that we could see on that? We kind of had you all, I guess, ramping up and closing the year around that 12 number. But are you expecting more flat production or lumpier? Or how is the – just any additional color you could give me on that, I'd appreciate.

Yeah, so just a level set so everybody kind of understands how we forecast activity going forward. Obviously, in the near term, I would say the next – six to 12 months, the most impactful piece to production ramp is going to be our ducks. So that's the 7.1 net ducks that we have in inventory. Next, kind of when you think about the next 12 to 24 months, that's going to be the permits that are in inventory. So that's the 4.6 net locations that we have in inventory. And so it's really, you know, largely the next nine or so months is going to be driven by our duck inventory. So, you know, it could be that You know, just based on the data that we're seeing, obviously very early and we don't have perfect information, but, you know, it could be more heavily weighted towards the first half of these nine months in terms of production than the latter part. It's just something that we'll have to monitor and, you know, as data comes in, we'll have better insight. But, you know, as being in essence a non-operated position, don't always have perfect data, but it could be that it's more front-end loaded in terms of kind of Q2, the first half of Q3 than the latter part in terms of the growth.

Perfect. Thank you for that. And the second question as a follow-up is going to be related to, I mean, you've discussed the payout ratio, but I'm kind of thinking more from the dividend perspective. Are you all necessarily targeting, say, maintaining that $0.60 per share or higher ratio? dividend as long as y'all can do so, remaining in that 70% to 80% range, I guess. And is that payout ratio kind of your flexor? Is that how you should think about it? I think a payout ratio really is driven by, you know, what our opportunity set is in front of us. So, you know, we've got plenty of acquisition opportunities and, you know, again, as we were saying, can use that flexibility with the retained cash in these price environments to help fund some of those opportunities that we see. But, you know, we did step up the base dividend from $0.14 to $0.16, and then we've got the variable piece on top. So, you know, we're just effectively paying out, you know, 70% to 80% of our discretionary cash flow. So, you know, obviously we'd like to see the um you know quarter after quarter but you know it's we're kind of looking at all the different variables uh that we have to spend capital on between uh our our reinvestments and uh return of capital shareholders awesome thanks guys yep thanks for joining so great great thank you grant at this time i'd like to hand the call back over to rob for any closing remarks

Now, again, we appreciate everybody joining us on our first quarter 2022 conference call and look forward to getting back together with you in August as we discuss our second quarter results. Thanks again for joining.

That concludes the Brigham Minerals first quarter 2022 earnings conference call. Thank you all for your participation. You may now disconnect.