SilverBow Resorces, Inc.

ladies and gentlemen thank you for standing by my name is brent and i will be your operator today at this time i would like to welcome everyone to the silver bow resources fourth quarter and year-end 2022 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 at that time simply press star followed by number one on your telephone keypad If you would like to withdraw your question, again, press star 1. Thank you. It is now my pleasure to turn today's call over to Jeff Maggots with Silver Bowl Resources. Sir, please go ahead.

Thank you, Brent, and good morning, everyone. Thank you very much for joining us for our fourth quarter and full year 2022 conference call. With me on the call today are Sean Wolverton, our CEO, Steve Adam, our COO, and Chris Abundas, our CFO. Yesterday afternoon, we posted a new corporate presentation to our website and will 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. 2022 was truly an exceptional year for Silver Bow, with strong execution on our business plan. We grew production in EBITDA by double digits, established new acreage blocks providing for additional inventory, completed four accretive acquisitions, and realized a 25% increase to our share price. Furthermore, Silver Bow was named as one of Houston's top workplaces for the third year in a row. The four acquisitions we completed in 2022 added a deep bench of premium inventory across our portfolio. As of year end, Silver Bow has over a decade of high rate of return drilling locations, two-thirds of which are oil locations. Using SEC pricing, our approved reserves increased nearly 60% year-over-year to 2.2 TCFE and our approved PV10 increased to $5 billion. At recent strip pricing, we estimate our approved PV10 is just under $3 billion. As of our earnings update in November, we shifted both of our drilling rigs to Webb County to develop Austin Chalkwells in our prolific Faskin area during a $5 per MCF gas price environment. As gas prices fell at the end of the year, both of our drilling rigs were shifted to our central oil area to capture better returns associated with higher oil prices. Remaining flexible in our operations and capital allocation has been and will continue to be a defining part of our business strategy and success. As we laid out in our 2023 budget yesterday, we are targeting a two-rig drilling program this year focused entirely on oil development. In recent months, oil prices have shown relative strength compared to the gas trip. As a result, we see the highest returns this year through acceleration of our oil development. Much of our focus will be on assets we have acquired over the last 24 months. Additionally, there are several short-term factors occurring in South Texas today. First, regional supply in Webb County increased roughly 50% year-over-year or approximately a half of BCF per day in response to increased drilling and completion activity and strong wealth performance. For reference, The Webb County rig count increased from a low of two rigs in late 2020 to a high of 17 rigs in late 2022. Regional supply is now pushing up against available pipeline capacity. Second, on the demand side, Mexico exports have trended below 2022 levels. Regional demand was further impacted by outages at a key LNG export facility in a warm winter season. The net effect is a governor on growth in Webb County gas in 2023, which should improve with multiple new pipeline projects expected to come online at the end of the year. This is where Silver Bow's balanced strategy stands out. We are well positioned to optimize our drilling schedule and accelerate development of our oil assets thanks to the actions we took over the last several years. Silver Bow has previously discussed achieving a longer term 50-50 balance between oil and gas. With this year's budget, we can accelerate that timeline and we expect liquids to comprise roughly 45% of our total production by year end 2023. Our key focus areas include our central oil area, our western condensate area, and our eastern extension area. We also plan to target the Austin Chalk Formation across these oily positions, where we are seeing strong performance to date and the potential for future drilling inventory upside. Furthermore, in addition to shifting both drilling rigs to our oily assets, we have elected to duck eight Webb County chalk wells pending higher gas prices. As Chris will further detail, 90% of our gas volumes are hedged in 2023, leaving little downside exposure to gas prices. At the same time, we are 50% hedged on oil for the year, so as we ramp our oil production, we'll benefit from any uplift in the oil price curve. To wrap up my prepared remarks, I would like to note that our capital budget is one piece of a multi-year strategy which is unchanged. We have the roadmap and the levers to pull to grow production, EBITDA, and free cash flow while simultaneously expanding our inventory and strengthening our balance sheet. Our team has an established track record of delivering on our key objectives through commodity cycles. We see a robust pipeline of opportunities ahead that will continue to unlock value for all of our stakeholders. With that, I will hand the call over to Steve.