SandRidge Energy, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Sandridge Energy fourth quarter 2020 earnings call. At this time, all participant lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please note, today's conference is being recorded. If you require any further assistance, please press star 0. I will now turn the conference over to Mr. David Zhu, Director of Finance. Thank you. Please go ahead, sir.

Thank you, and welcome, everyone. With me today are Carl Gaber, our CEO, Salah Zamudi, our CFO, and Grayson Pratt, our CO, as well as other members of management. We would like to remind you that today's call contains forward-looking statements and assumptions. which are subject to risk and uncertainty, and actual results may differ materially from those projected in these forward-looking statements. We may also refer to adjusted EBITDA and adjusted G&A and other non-GAAP financial measures. Reconciliation of these measures can be found on our website.

Thank you, and good morning. Our earnings release yesterday, as well as the 10-K and investor presentation that we will file and put on a website later today, provide substantive detail on our financial and operating performance during the fourth quarter as well as full year 2020. Those documents also provide a formal guidance for 2021. Accordingly, as usual, we'll keep our prepared remarks short. 2020 was literally transformational for Sandra. We significantly streamlined our organization with our personnel window from 270 at year-end 2019 to just over 100 today. Most of this reduction is due to significant outsourcing of non-core, more administrative functions. Costs came down commensurately with both adjusted G&A and LOE down just over 50% year-over-year. We believe we compare favorably with our peers on both an absolute and per BLE cost basis. We tightened our capital expenditures too, slashing spend to about $5 million this past year compared to more than $160 million the year prior. Our aggressive cost and capital discipline, coupled with the sale of a non-core headquarters building in Oklahoma City and North Park Basin asset in Colorado, enabled us to literally flip our net debt from over $50 million at year end 19 to a current net cash position of roughly the same magnitude. On the operations side, we were able to increase our net operating working interest by buying in at a very attractive discount to PDP value, the overriding loyalty interest in our wells held by Sanders Mississippian Trust II. We anticipate having a similar opportunity later this spring with our sole remaining affiliated trust. This past fall, Sandridge Mississippian Trust One announced the commencement of its dissolution process. Despite the challenges of navigating COVID-19, as well as the various organizational shifts within Sandridge, our team remained focused. We met or beat all operational guidance metrics provided in May of last year, and they have continued our streak without a recordable HSE incident until it's now 31st month. In 2021, we plan to maintain this organizational system. Specifically, we plan to continue to press cost efficiencies and implement small ball initiatives to optimize our production profile. Put differently, we will maximize the cash generation of our business. Simultaneously, we plan to shift our strategic attention externally, We believe the oil and gas industry generally and our core mid-con base in particular would benefit from consolidation. Asset aggregation offers several levers to drive shareholder value, from one, capturing scale economies in both the field and back office, to two, hydrating investment inventory, to three, accessing expanded sources of capital, to four, providing our shareholders expanded liquidity, to finally gaining a broader institutional investor and research model. Finding an economically attractive way to grow our PDP asset base or combine our assets with those of another company in a value-increasing manner will be a key emphasis in 2021. We believe our publicly traded equity growing net cash position and streamlined and scalable organizational structure positions us well to potentially benefit from industry consolidation. Regardless, know that we'll be disciplined stewards of the company's cash. If we can't deploy that capital to expand the PDV footprint in an economically improved manner or to facilitate a value-enhancing merger, we'll seek to return that cash to shareholders in an efficient manner. We'll now open the call to questions.