SilverBow Resorces, Inc.

Thank you for standing by. At this time, I would like to welcome everyone to the Silver Bow of Resources third quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. Jeff Magids, Director of Finance and Investor Relations, you may begin your conference.

Thank you, Cheryl, and good morning, everyone. Thank you very much for joining us for our third quarter 2022 conference call. With me on the call today are Sean Wolverton, our CEO, Steve Adam, our COO, and Chris Abundance, our CFO. Yesterday afternoon, we posted a new corporate presentation to our website, and we'll occasionally refer to it during this call. We encourage listeners to download the latest materials. Please note that we may make references to certain non-GAAP financial measures which are reconciled to their closest GAAP measure in the earnings press release. Our discussion today may include forward-looking statements which are subject to risk and uncertainties, many of which are beyond our control. These risks and uncertainties are described more fully in our documents on file with the SEC, which are also available on our website. With that, I will now turn the call over to Sean.

Thank you Jeff and thank you everyone for joining our call this morning. Silver Bow continues to execute on both our organic drilling program and our creative A&D strategy. The third quarter marked a key inflection point in our growth strategy. During the quarter we announced our sixth and seventh acquisitions since August of last year and operationally we focused on the addition of a second drilling rig in the integration of the Sundance assets. We have added significant scale through acquisitions and high return drilling over the last 18 months, and going forward, Silver Bow is primed for further growth. Before I lay out our multi-year strategic objectives, I would like to briefly review some notable highlights since our last call. In September, we announced a new 7,500 net acre position in the dry gas Dorado window of Webb County. This was the culmination of a series of bolt-on acquisitions, leasing deals, and drill-to-earn agreements assembled over the last year. The stacked pay co-development opportunity consists of over 50 net drilling locations, which are northeast of our existing Webb County position and expands our high return gas inventory in the Eagleford and Austin Chalk. As a result, at quarter end, our Webb County position totals 17,000 net acres in nearly 200 drilling locations with an average rate of return exceeding 100%. At the beginning of October, we moved both of our drilling rigs to our Webb County gas area. This decision was based on continued strong Austin Chalk results. To date, we have brought online seven Austin Chalk wells, and all of them are exceeding expectations. In total, we will drill 16 wells at Faskin during the third and fourth quarters, with 15 of the 16 targeting the Austin Chalk and one targeting the Upper Eagle Fern. The returns we are generating in the Austin Chalk warranted this shift in our capital allocation, and much of this development should benefit from strong winter pricing. In addition, specific to 12 of the 16 wells, our non-op partner elected not to participate in those projects. As a result, we will add an incremental four and a half net wells to our 22 development which increases our working interest in those wells from 64% to 100%. We really like this opportunity, and we estimate the PV10 value of the incremental working interest to be approximately $100 million. The ability to execute on this opportunity highlights Silver Bow's operational flexibility. By the end of 22, this rig will return to its planned liquids development and we will resume our balanced strategy of one gas focused rig and one liquids focused rig. Also in October, we announced the acquisition of 5200 net acres in our Carnes Trough position, which now spans Gonzales, DeWitt and Lavaca counties. I'm happy to report that we successfully closed the acquisition earlier this week. The Carnes Trough assets significantly enhance our existing position by adding incremental working interest in new adjacent acreage, which provides for extended laterals, additional drilling locations, and more efficient operations. Pro forma for this deal, we have a consolidated 13,000 net acre block which now has 100 high rate of return locations spanning the Eagleford and Austin shot. We plan to allocate capital to this area early next year. This has been a banner year for the company, and we have significant momentum to build on for the remainder of the year and into 2023. Silver Bow's growth trajectory is driven by strong execution by our operational and business development teams, as they drill high rate of return projects and make accretive acquisitions. Having covered our recent results, I would now like to outline our multi-year strategic objectives and the roadmap ahead. Our first objective is to drive double-digit growth while living within cash flow. Using 2022 as a baseline, we expect to grow production and EBITDA by more than 25% annually over the next two years. This growth will be governed by a reinvestment rate below 75% with free cash flow used to pay down debt. Subject to reinvestment rate and leverage thresholds, we have contingent capital earmarked to deploy a third rig in the second half of 2023 in our Carnes Trough area. With the addition of a third rig, we have visibility towards reaching a key scale target of over a half a billion cubic feet equivalent per day of production. Our second key objective is portfolio expansion. Silver Bow has added over 350 drilling locations year to date through acquisitions and currently has well over a decade of inventory life. As of today, two-thirds of our locations are oil-weighted, representing a major shift from Silver Bow's historical inventory mix in highlighting the meaningful change accomplished through our strategic A&D activity. A core tenet of our strategy going forward will be to maintain a minimum inventory life of 10 years as we focus not only on sustaining but building scale. We believe that Eagleford remains an opportunity-rich area to add additional inventory, as we've done in the past. We believe we can unlock additional potential through multiple avenues, including grassroots leasing, acquisitions, and identifying stacked pay potential on existing acreage. Our third key objective is to lead our peers in capital efficiency and cost structure. As shown on slide 16 of our corporate presentation, Silver Bow has one of the lowest break-even costs across the domestic landscape. Additionally, as shown on slide 17, Silver Bow has drilled half of the top 50 Webb County gas wells. Furthermore, favorable Gulf Coast pricing allows us to realize prices close to or above benchmarks and to deliver consistently higher netbacks. And finally, we have one of the lowest G&A platforms in the industry, as we estimate next year's per unit cash G&A to fall below $0.10 per MCFE. Our fourth objective is to deliver our balance sheet and increase liquidity. Through September 30th, we have funded $300 million in cash acquisition payments while simultaneously increasing liquidity by over $60 million and holding leverage flat from year end. Through cash flow generation and debt reduction, we are targeting long-term leverage between a half a turn and one turn. With these multi-year objectives in mind, we have provided updated 23 guidance. Our outlook incorporates the most recent acquisitions and third quarter production updates. We are raising our 23 production guidance to average between 400 to 420 mm CFE per day with EBITDA of approximately $700 million. As we settle into a leverage ratio below one times next year, we will have contingent capital to deploy a third rig. As I mentioned earlier, This will accelerate our ability to build greater scale. We continue to see the highest near-term reinvestment opportunities through the drill bit and accretive acquisitions, with share repurchases being the priority of our future shareholder returns program. Last but not least, I'm excited to share that Silver Bow will be publishing its inaugural sustainability report in the first half of next year. As a company that prides itself on operating in a responsible manner with steadfast transparency, we look forward to sharing our ESG best practice commitments, initiatives, and goals. With that, I will turn the call over to Steve to provide an operational update.