Northern Oil and Gas, Inc.

Greetings and welcome to the Northern Oil fourth quarter and year-end 2022 earnings conference call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Evelyn Inferna, Vice President of Investor Relations. Thank you, Evelyn. Please go ahead.

Thank you, Paul. Good morning and welcome to our fourth quarter 2022 earnings conference call. Yesterday, after the market closed, we released our financial results for the fourth quarter and fiscal 2022. You can access our earnings release and presentation on our investor relations website, and our Form 10-K will be filed with the SEC within a few days. I'm joined here this morning by NOG's Chief Executive Officer, Nick O'Grady, our President, Adam Derlin, and our Chief Financial Officer, Chad Allen, and our EVP and Chief Engineer, Jim Evans. Our agenda for today's call is as follows. Nick will provide his remarks on the quarter and on our recent accomplishments, and Adam will discuss an overview of operations, and Chad will review our fourth quarter financials and walk through our 2023 guidance. After our prepared remarks, the executive team will be available to answer any questions. Before we go any further, let me 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 our forward-looking statements. Those risks include, among others, matters that we've discussed in our earnings release, as well as in our filings 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 forward-looking statements. During today's 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 gap measures can be found in our earnings release. With that, I'll turn the call over to Nick.

Thank you, Evelyn. I'd like to take a few moments to welcome Evelyn to the NOG team. Evelyn comes to NOG with tremendous amounts of capital markets and investor relations experience, and we're excited to have her on board. All right, I'll get down to it with five key points. Number one, business fundamentals are strong. We delivered strong results in the fourth quarter and the full year. Despite lower commodity prices and severe weather, we generated approximately $90 million of cash in the fourth quarter and still were within our annual production guidance. As we enter Q1, the business is back online and building momentum driven by strong turn in line activity in December. Number two, growth. The fourth quarter was incredibly busy for the company. We closed on three Permian acquisitions and in the first week of January, we closed on our Midland Petro transaction. In total, these represented over 750 million of closings and over 900 million in acquisitions announced in 2022, which should translate into more than 20% growth in our year over year production on a reduced diluted share count. This is following roughly 40% growth in 2022, all the more impressive given we are in a low growth era for most public energy companies. As the largest, best capitalized non-operator with superior data insight and an unmatched track record, we are proud to be the preferred partner to the public and private upstream community. NOG's differentiated positioning sets the stage for significant relative and absolute outperformance in 2023. We have transformed the company by diversifying and growing our footprint, enhancing the quality of our portfolio, and meaningfully improving the strength of our balance sheet. Despite inflationary pressures and lower current commodity strips, we expect to generate significant cash flow and production growth in 2023. Our disciplined and efficient transaction underwriting, prudent and sophisticated capital formation, and superior data insights have driven and we expect will continue to drive consistent multi-year equity outperformance. Number three, the 2023 outlook. Our 2023 guidance, which Chad will delve into later, reflects capital efficient growth, conservative cost inflation assumptions, and as I just mentioned, significant and differentiated volume and cash flow growth throughout the year. At our new elevated level of baseline production, we expect to generate significant levels of free cash flow in 2023. As the Midland Petro project reaches completion, it sets the stage for a substantial increase in free cash flow in the coming years, enabling us to further accelerate the company's growth and enhance shareholder returns. Number four, competitive advantage. We believe our competitive advantage has expanded in 2022. Over the last four years, we've not only rebuilt our infrastructure, augmented the financial strength, and improved the asset positions of the company, but have also invested in data science to continuously improve our technical analysis. With the launch of our purpose-built AI-powered system in January, we expect to further enhance the power of our proprietary data and the accuracy and efficiency of our decision-making. More specifically, we believe our enhanced Analytics will enable us to efficiently find differentiated value and properties and further enhance our risk management tools. Our team does not rest on its laurels, and we believe we are unmatched in the non-operated sphere given our scale, data analytics, and underwriting advantages. We believe that few can compete with us for the high-quality properties that we target daily, and our scale allows us to play in a field largely on our own. As the breadth of opportunities has expanded for us, both from a basin and structural basis, our competitive advantage has only widened. Number five, shareholder returns. Our goal is to provide our shareholders with the highest possible total return over the long term. We have implemented a multi-pronged approach, including share repurchase programs, repurchasing high-cost debt, and increasing the cash dividends for our common shareholders. During the fourth quarter, we continue to tactically repurchase our common stock and senior notes. As market opportunities allow, we will continue opportunistic common buybacks and debt repurchases throughout 2023 and beyond. A few weeks ago, we announced a 13% increase in our quarterly common stock dividend to $0.34 per share for the first quarter. and introduced a plan to accelerate the dividend further to our target of 37 cents per share about two quarters ahead of schedule. We continue to have the goal of providing an attractive yield for our investors. We strongly believe that the consistency of a stable and growing quarterly dividend is more valuable to our shareholders and our equity value over the long term. Our Goldilocks strategy should give us the ability to both pay healthy growing current income to our shareholders, and also allow for our significant excess retained cash flow to provide for value-added bolt-on acquisitions and growth opportunities. Going forward, we remain focused on driving the highest total return to shareholders, focusing on optimal yield, tax and capital efficiency, and management of our overall leverage levels. The good news is with the business positioned for strength, We anticipate being able to deliver continued growth to our returns while still leaving room for flexibility and the ability to scale the business responsibly over time. 2022 was another evolutionary leap forward for NOG, and I want to recognize the NOG team from top to bottom for their hard work and dedication to all we've accomplished. In closing, I'll remind you as I always do that we are a company run by investors for investors, And I want to thank you all for taking the time to listen to us today. With that, I'll turn the call over to Adam.