Northern Oil and Gas, Inc.

Greetings. Welcome to the NOG fourth quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Mike Kelly, Chief Strategy Officer. Thank you. You may begin.

Good morning. Thank you for joining us for our discussion of Northern's fourth quarter 2021 earnings release. Yesterday, after the market closed, we released our financial results for the fourth quarter. You can access our earnings release on our website, and our Form 10-K will be filed with the SEC within the next few days. We also posted a new investor deck on the website as well last night. I'm joined here this morning with Northern CEO Nick O'Grady, our President Adam Durlam, Our CFO, Chad Allen, and our EVP and Chief Engineer, Jim Evans. Our agenda for today's call is as follows. Nick will start us off with his comments regarding Q4 and our go-forward strategy. After Nick, Adam will give you an overview of our operations, and then Chad will review NOG's Q4 financials and 2022 guidance. After that, the executive team will be available to answer any questions. Before we go any further, though, let's cover our safe harbor language. Please be advised that our remarks today, including the answers to your questions, may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from the expectations contemplated by these forward-looking statements. Those risks include, among others, matters that we have described in our earnings release as well as in our findings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. We disclaim any obligation to update these four Lincoln statements. During the conference call, we may discuss certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, and free cash flow. Reconciliations of these measures to the closest GAAP measures can be found in the earnings release that we issued this morning. With that taken care of, I will hand the call over to Northern CEO, Nick O'Grady.

Thanks, Mike, and thank you for joining us this morning. As usual, I will get down to it with five key points. Number one, execution. We closed out 2021 in a very strong fashion with record profits across the board, record cash flow, record free cash flow, and we exceeded all material internal goals we set at the beginning of the year. We are particularly proud of exceeding our free cash flow target of $175 million by over $30 million, higher than forecast production volumes and strong execution and integration of acquired properties. Number two, capital allocation. At current strip prices, over the next four years, the company could generate its entire market cap in free cash flow. This puts us in an incredible position to allocate capital, which we will do in the following four ways. Number one, our organic development. Number two, small scale and bolt-on package M&A. Number three, further debt retirement and Finally, number four, shareholder returns, primarily in the form of growing dividends, and we can also opportunistically repurchase stock, particularly if the valuation remains low even at mid-cycle. I want to emphasize one more time what we said when we purchased Veritas. We believe the vast majority of bolt-on M&A can be done within the confines of our balance sheet going forward, which will not likely require raising equity in the public markets. The capital... from our 2021 equity offerings was intended to provide us with enough dry powder for us to be able to take advantage of strategic acquisitions on a go-forward basis. We remain the largest and most active working interest consolidator. Adam will discuss further the opportunities we currently see in front of us. Number three, shareholder returns. As mentioned above, we have a tremendous amount of confidence in our business model, which has given us the ability to communicate a dividend plan for the next two years. We have already delivered higher-than-promised dividends, and we are confident that we can continue to exceed our dividend plan. Given the predictability of our free cash flow, we expect to retire all our bank debt in 2023 and then start building cash and returning more to our shareholders. Recently, our board has authorized a modest but important preferred stock repurchase program. We have already retired $7.2 million in face value of preferred stock. This has multiple benefits. simplifies our balance sheet, reduces our annual dividend payments by about a half a million dollars a year, and effectively reduces the diluted share count by approximately 316,000 shares. Number four, outlook. Chad will go into our 2022 guidance in more detail, but there should be relatively few surprises for our investors as we integrate the Veritas assets, execute on the organic activity on our acreage, and weigh additional ground game and redeployment opportunities as they become available. We see significant and steady production growth on our properties throughout 2022. We have tremendous optimism as we head into 2022 and 2023 that NOG is poised for some significant multi-year growth. We feel that we are in an enviable position and our process remains unchanged, disciplined, and focused on the best opportunities. Number five, consistency. You'll notice if you've listened to our conference calls over the last three years, there's a lot of consistency. We've talked about capital allocation, debt reduction, and ultimate returns to shareholders consistently since mid-2018. If you watch our actions, we have carefully scaled the business from less than 15,000 barrels equivalent per day while continuing to cut the cost of our credit and materially lower leverage ratios. All of the hard work for the past three years has given us the power of scale, and our focus on asset quality should deliver consistent and predictable results for our shareholders. When we bought 66 acres in the Permian to begin our diversification in 2020, it might have seemed insignificant, but that position has grown to 9,000 acres and substantial production less than two years later, and it should account for almost half of our capital spending in 2022. When we declared our first dividend in May of last year, it was small, but we told you it was just the beginning. The quarterly dividend has increased over four and a half times since then. In the coming quarters and years, we will work hard to execute in such a fashion so that we can deliver and even exceed our dividend plan. The entire team at NOG is up to the challenge, and we will continue to deliver superior results for our shareholders. NOG is a company run by investors for investors, and I'd like to thank each and every one of you for taking the time to listen to us today. With that, let me turn it over to Adam.