Permian Resources Corporation Class A

Please stand by, we're about to begin. Good morning and welcome everyone to Permian Resources conference call to discuss its first quarter 2024 earnings conference call. Today's call is being recorded. A replay of the call will be accessible until May 22nd, 2024 by dialing 1-800-938-2488 and entering the replay access code 24995 or by visiting the company's website at www.permianres.com. At this time, I will turn the call over to Mr. Hayes Mabry, Permian Resources Vice President of Investor Relations, for some opening remarks. Please go ahead, Mr. Mabry.

Thanks, Beau, and thank you all for joining us on the company's first quarter 2024. On the call today are Will Hickey and James Walter. our Chief Executive Officers, and Guy Oliphant, our Chief Financial Officer. Yesterday, May 7th, we filed a Form 8K with an earnings release reporting first quarter results. We also posted an earnings presentation to our website that we will reference during today's call. I would like to note that many of the comments during this earnings call are forward-looking statements that involve risk and uncertainties that could affect our actual results and plans. Many of these risks are beyond our control and are discussed in more detail in the risk factors and the forward-looking statement sections of our filings with the SEC, including our Form 10-Q, which is expected to be filed later this afternoon. Although we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance, and actual results or developments may differ materially. We may also refer to non-GAAP financial measures that help facilitate comparisons across periods and with our peers. For any non-GAAP measure we use, a reconciliation to the nearest corresponding GAAP measure can be found in our earnings release or presentation, which are both available on our website. With that, I will turn the call over to Will Hickey, co-CEO.

Thanks, Hayes. I truly believe that the first quarter was the most compelling quarter Permian Resources has delivered so far. We were able to deliver production and free cash flow above our expectations, close out the integration of Earthstone ahead of schedule while increasing our annual synergy target by 50 million, and continue to execute on a creative A&D, with approximately 270 million of acquisitions announced this year. It takes an incredible team to deliver such strong execution quarter after quarter, and I look forward to sharing some more detail on Q1 today. Moving into quarterly results, I'm pleased to announce Q1 production exceeded expectations with total production of 320,000 barrels of oil equivalent per day and oil production of 152,000 barrels of oil per day. Our strong production was attributable to multiple factors, including accelerated earthstone DMC efficiencies and higher operational runtimes. Strong production results in capex of $520 million in the quarter resulted in adjusted operating cash flow of $844 million or $1.09 per share and adjusted free cash flow of $324 million or $0.42 per share. We remain highly focused on sustaining a strong balance sheet with leverage of approximately one times and increased liquidity to over $2 billion. As part of our regularly scheduled spring bank redetermination process, we increased aggregate lender commitments under the credit facility from $2 to $2.5 billion, while maintaining a borrowing base of $4 billion. Turning to return of capital, our strategy remains consistent. We delivered on our previously announced increase-based dividend of $0.06 per share, a 20% increase from previous quarters. For the variable portion of our return of capital, first, we repurchased a total of 2 million shares in the quarter. The remainder of our capital return we paid out via a variable dividend of 14 cents per share, bringing the all-in quarterly return of capital to 24 cents per share. Now I'd like to spend a little time talking about the efficiencies and synergies that impacted the business in such a positive way this quarter. When we rolled out the Earthstone acquisition, we were highly confident that we could reduce drilling days and completion days and improve production operations, driving material synergies to be fully realized by year-end 2024. We have already achieved that and more. In just under five months, we've high-graded all legacy earthstone rigs and completion crews. This, combined with PR best practices, helped drive an 18% reduction in earthstone drilling days per well and approximately 50% reduction in completion days per well in the first quarter, which we were initially anticipating achieving by mid-year 2024. Additionally, we are seeing some efficiency gains in the Midland Basin that were not originally forecasted. which is a testament to our team's ability to unlock value in new assets quickly. In addition, runtimes improved as a result of better compression performance, optimized artificial lift, and improved chemical programs. The combination of accelerated activity and better runtimes was the primary driver of the strong production performance in Q1. The impact of the combined PR team's integration execution is that we have already achieved $175 million per year of synergies and are increasing our synergy target to an annual run rate of $225 million. As I mentioned earlier, the main drivers of this increase are operational. For DC&F, we increased our per-well savings from $1.2 to $1.5 million. Similarly, we expect to be able to improve margins by approximately $1 per VOE by year-end, but we've already implemented strategies in the field to realize the majority of this improvement today. Drivers of the margin improvement include reduced trucking, upgraded electrical infrastructure, rationalizing vendors, and optimizing midstream agreements. Integrations are never easy, but what our team accomplished over the last six months is a testament to a lot of hard work and dedication, and we're proud to say that Earthstone is fully integrated. With that, I'll turn it over to James to talk to A&D and an update on our 24 plan.