Vital Energy, Inc.

pneumatics and enhanced detection program. In 2023, we are expanding our continuous emissions monitoring to cover approximately 70% of our gross operated oil production, and we maintain our commitment to regularly inspecting every operated site. Additional pneumatic conversions and electrification of our field operations, including active drilling rigs and our electric frac fleet, will even further reduce emissions. Similarly, we are making progress on reducing flaring associated with our operations. In 2022, we reduced routine flaring 42% from our 2019 baseline and expect to lower this further in 2023 as we work towards our target of eliminating routine flaring by 2025. This team has delivered a great first quarter, continuing our operational track record and advancing the deployment of new technology across the field. I'll now hand the call over to Brian for a financial update.

Thank you, Katie. Vital Energy's excellent financial results in the first quarter were driven by operational success coupled with disciplined investments. We were essentially free cash flow break even in the first quarter, much better than anticipated at the beginning of the year due to the production gains Katie mentioned and lower than expected capital investments. The remainder of the year we expect to be free cash flow positive. Determining factors will be production, which has been strong to date, capital, which we have a high degree of confidence in today, and commodity price. We will use the free cash flow generated by the business to reduce debt at current commodity prices and direct some towards return of cash to shareholders if commodity prices rise significantly. Most expenses were in line to lower than forecasted, other than G&A expenses, excluding LTIP and transaction expenses, which were $3.02 per BOE, higher than our guidance of $2.40 per BOE. Summary drivers were one-time expenses associated with the timing of accounting for the 2022 inflationary retention bonus paid out last year, first quarter weighting of benefits, and accruals related to both the 2022 and 2023 compensation plans. We expect G&A excluding LTIP and transaction expenses to average around $2.50 per BOE for the balance of the year, which is in line with historical levels. Vital Energy is off to a great start in 2023, executing well both operationally and financially. As we generate free cash flow through the end of the year, we will remain focused on reducing debt and maintaining strong liquidity. Lastly, the strength of our capital structure was recognized by our bank group during our spring redetermination process, and our RBL borrowing base and commitments were reaffirmed. With that, I will turn it over to the operator for questions.

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