Q4 2023 Ring Energy Inc Earnings Call

[music].

Operator: Good morning, and welcome to the Ring Energy fourth quarter and full year 2023 earnings conference call. All participants will be in listen only mode.

Good morning, and welcome to the ring energy fourth quarter and full year 2023 earnings conference call.

All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press the star key, then 1 on your telephone keypad.

After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad.

Operator: To withdraw your question, please press star then 2. Please note, this event is being recorded. I would now like to turn the conference over to Al Petrie, Investor Relations for Ring Energy. Please go ahead.

To withdraw your question. Please press Star then two.

Please note this event is being recorded.

I would now like to turn the conference over to Al Petrie Investor Relations for Ring Energy. Please go ahead.

Al Petrie: Thank you, Operator, and good morning, everyone. We appreciate your interest in Ring Energy. We'll begin our call with comments from Paul McKinney, Chairman of the board and CEO, who will provide an overview of key matters for the fourth quarter and full year 2023, as well as our outlook. We'll then turn the call over to Travis Thomas, Ring's Executive VP and Chief Financial Officer, who will review our financial results. Paul will then return with some closing comments before we open the call for questions.

Thank you operator, and good morning, everyone. We appreciate your interest in <unk> energy will begin our call with comments from Paul Mckinney, Our chairman of the board and CEO, who will provide an overview of key matters for the fourth quarter for year 2023, as well as our outlook.

I'll, then turn the call over to Travis Thomas Rings, Executive VP, and Chief Financial Officer, who will review our financial results. Paul will then return with some closing comments before we open the call for questions.

Al Petrie: Also joining us on the call today and available for the Q&A session are Alex Dyes, Executive VP of Engineering and Corporate Strategy, Marinos Baghdati, Executive VP of Operations, and Steve Brooks, Executive VP of Land, Legal, Human Resources, and Marketing. During the Q&A session, we asked you to limit your questions to one and a follow-up. You're welcome to reenter the queue later with additional questions.

Also joining us on the call today and available for the Q&A session are Alex Dias Executive VP of engineering at corporate strategy Arena as Bad Daddy Executive VP of operations, and Steve Brooks Executive VP of land legal human resources and marketing.

During the Q&A session. We ask you to limit your questions to one and a follow up.

You are welcome to reenter the queue later with additional questions. I would also note that we have posted an updated corporate presentation on our website.

Al Petrie: I would also note that we have posted an updated corporate presentation on our website. During the course of this conference call, the company will be making forward-looking statements within the meaning of federal securities law. Investors are cautioned that BARD-looking statements are not guarantees of future performance, and actual results of development may differ materially from those projected in the BARD-looking statement. Finally, the company can give no assurance that such far-looking statements will prove to be correct.

During the course of this conference call. The company, we're making forward looking statements within the meaning of federal Securities laws investors are cautioned that forward looking statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward looking statements.

Finally, the covenant and can give no assurance that such forward looking statements will prove to be correct.

Al Petrie: Ring Energy disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Accordingly, you should not place undue reliance on forward-looking statements. These and other risks are described in yesterday's press release and in our filings with the SEC. These documents can be found in the investment section of our website, located at www.ringenergy.com. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially.

Green energy disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information future events or otherwise.

You should not place undue reliance on forward looking statements. These and other risks are described in yesterday's press release and in our filings with the SEC. These.

These documents can be found in the investors section of our website located at Www dot rate energy Dot com.

Should one or more of these risks materialize or should underlying assumptions prove incorrect actual results may vary materially.

Al Petrie: This conference call also includes references to certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable measure under GAAP are contained in yesterday's earnings release. Finally, as a reminder, this conference call is being recorded, and I'd now like to turn the call over to Paul McKinney, my chairman and CEO. Thanks, Al, and thank you to everyone joining us today and for your interest in Ring Energy. Looking back on 2023, it was a very good year.

This conference call also includes references to certain non-GAAP financial measures.

Conciliation of these non-GAAP financial measures to the most directly comparable measure under GAAP are contained in yesterday's earnings release.

Finally, as a reminder, this conference call is being recorded and I would now like to turn the call over to Paul Mckinney, Our chairman and CEO.

Thanks Al and thank you to everyone join us today and your interest in ring energy looking back to 2023. It was a very good year. We ended at establishing new records during the fourth quarter and the full year, both operationally and financially as we shared in our earnings release, we grew our <unk>.

Paul D. McKinney: We ended it by establishing new records during the fourth quarter and the full year, both operationally and financially. As we shared in our earnings release, we grew our year-over-year production-related sales volumes by 47 percent. Our adjusted EBITDA by approximately 21 percent and our adjusted free cash flow by 30%. This was a direct result of our team's ongoing efforts related to the key aspects of our growth strategy. The primary contributors to our success are directly related to the successful integration of the two acquisitions executed over the past 18 months, Stronghold Energy II and the Founders Oil and Gas Assets Act.

Year over year production related sales volumes by 47%, our adjusted EBITDA by approximately 21% and our adjusted free cash flow by 30%. This was a direct result of our team's ongoing efforts related to the key aspects of our growth strategy. The primary contributors to our success are directly related.

The successful integration of the two acquisitions executed over the past 18 months.

Strong whole energy too and the founders oil and gas asset acquisitions.

Paul D. McKinney: Our disciplined and highly successful capital spending program also contributed significantly, as did our continuous focus on reducing operating costs. These acquisitions have further established our strategic foothold in the central basin platform of the Permian Basin and have significantly increased our undeveloped inventory of highly economical drilling locations. Another contributor to our success was the divestiture of certain non-core assets located in the Delaware Basin, the operated assets in the state of New Mexico, and a few assets in Gaines County, Texas. As a result, all our operated acreage is now located in the business-friendly state of Texas.

Our disciplined and highly successful capital spending program also contributed significantly as did our continuous focus on reducing operating costs.

These acquisitions have further established our strategic foothold in the Central basin platform of the Permian Basin and have significantly increased our undeveloped inventory of highly economic drilling locations.

Another contributor to our success was the divestiture of certain non core assets located in the Delaware Basin. The operated assets in the state of New Mexico, and a few assets in Gaines County, Texas.

As a result of.

All our operated acreage is now located in a business friendly state of Texas. Our average operating costs are lower since the assets sold.

Paul D. McKinney: Our average operating costs are lower since the assets sold had higher per BOE operating costs than most of our retained assets. And we move the undeveloped opportunities of these assets, which were challenged to compete in our portfolio, to operators that value them higher. The outperformance of our fourth quarter capital spending program is largely due to new well production performance that brought our sales volumes near the high end of guidance, providing for an 11% increase in our daily BOE production over the third quarter of 2023. During the fourth quarter, we invested $38.8 million in capital expenditures and drilled four horizontal wells, three in the CBP and one in the Northwest Shelf, and three vertical wells in the Central Basin Platform. We completed 10 wells, 6 in the CVP and 4 in the Northwest Shelf.

Had higher per BOE operating cost than most of our retained assets and we moved the undeveloped opportunities at these assets that were challenged to compete in our portfolio to operators that value them higher.

The outperformance of our fourth quarter capital spending program is largely due to new well production performance that brought our sales volumes near the high end of guidance, providing for an 11% increase in our daily BOE production over the third quarter of 2023.

During the fourth quarter, we invested $38 $8 million in capital expenditures and drilled four horizontal wells three in the CBP and one in the northwest shelf and three vertical wells in the Central Basin platform. We completed 10 wells fixing the CVP and four in the northwest shelf. Additionally.

Paul D. McKinney: Additionally, costs for capital workovers, infrastructure upgrades, and leasing were also included. For the year ended December 31, 2023, we spent $152 million, which included the cost of drilling, completing, and placing on production 20 horizontal wells, 14 in Northwest Shelf, and 6 in the Central Basin Platform, and 11 vertical wells in the Central Basin Platform. Also included in the full year capital spending were costs for capital workovers, infrastructure upgrades, recompletions, and leasing. Ring also participated in the drilling and completion of five non-operated wells in the Northwest Shelf and Central Basin Platform.

Cost of capital Workovers infrastructure upgrades and leasing were also included.

For the year ended December 31, 2023, we spent $152 million.

Which included cost to drill complete and placed on production 20 horizontal wells 14, and northwest shelf and six in the Central Basin platform and 11 vertical wells in the Central Basin platform.

Also included in our full year capital spending.

<unk> four capital Workovers infrastructure upgrades re completions and leasing ring also participated in the drilling and completion of five non operated wells in the north West shelf and Central Basin platform.

Paul D. McKinney: Adjusted EBITDA was a record $65.4 million for the fourth quarter, which represents a 12% increase over the previous quarter of $58.6 million and a 16% increase over the fourth quarter of 2022, which was $56.3 million. Adjusted free cash flow for the fourth quarter was a record $16.3 million compared to $6.1 million in the third quarter of 2023, with a 165% increase primarily due to increased revenue and lower capital spending in the fourth quarter. Fourth quarter 2023 adjusted free cash flow increased 197% from $5.5 million for the fourth quarter of 2022.

Adjusted EBITDA was a record $65 $4 million for the fourth quarter, which represents a 12% increase over the previous quarter of $58 $6 million and a 16% increase over the fourth quarter of 2022, which was $56 $3 million.

Adjusted free cash flow for the fourth quarter was a record $16 $3 million compared to $6 1 million in the third quarter of 2023 with the 165% increase primarily due to increased revenue and lower capital spending in the fourth quarter fourth quarter 2023, adjusted free cash flow.

<unk>, 197% from $5 5 million for the fourth quarter of 2022.

Paul D. McKinney: Adjusted cash flow from operations was a record $55.1 million for the fourth quarter, compared to $48.5 million for the prior quarter and $47.4 million for the fourth quarter of the prior year. With respect to our cash return on capital employed, in 2023, our capital spending program generated slightly more than 17% return. At this point, and on behalf of the Board of Directors and Management team, I would like to thank our employees for their hard work and dedication to the success we enjoyed in 2023 and to express my excitement for the opportunity to continue working along their side in the future as we further execute our value-focused, proven strategy. With respect to our reserves, we ended 2023 with SEC total approved reserves of 129.8 million barrels of oil equivalent versus 138.1 million barrels of oil equivalent at the end of 2022.

Adjusted cash flow from operations was a record $55 $1 million for the fourth quarter compared to $48 5 million for the prior quarter.

And 47 4 million for the fourth quarter of the prior year of 2022.

With respect to our cash return on capital employed in 2023, our capital spending program generated slightly more than 17% return.

At this point.

On behalf of the board of Directors and management team I would like to thank our employees for their hard work and dedication for the success. We enjoyed in 2023 and to express my excitement for the opportunity to continue working longer side in the future as we further execute our value focused proven strategy.

With respect to our reserves. We ended 2023 with <unk> SEC total proved reserves of $129 8 million barrels of oil equivalent versus $138 1 million barrels of oil equivalent at the end of 2022, we benefited from reserve additions of $8 2 million barrels of oil equivalent.

Paul D. McKinney: We benefited from reserve additions of 8.2 million barrels of oil equivalent from acquisitions and $4.8 million BOE from our internal development efforts. Offsetting these increases were 6.6 million barrels of oil equivalent of production, 5.7 million barrels of oil equivalent for the sale of non-core assets, 3.7 million barrels of oil equivalent related to changes in performance and other economic factors, and $5.3 million barrels of oil equivalent for reductions in year-over-year In short, a significant driver in the reduction in our year-end SEC-approved reserves was associated with decreased SEC prices.

<unk> from acquisitions, and $4 8 million Boe.

From our internal development efforts offsetting these increases were $6 6 million barrels of oil equivalent of production $5 7 million barrels of oil equivalent for the sale of noncore assets $3 7 million barrels of oil equivalent related to changes in performance and other economic factors.

And $5 $3 million million barrels of oil equivalent for reductions in year over year prices in short a significant driver in the reduction in our.

Year end SEC proved reserves was associated with the <unk>.

Decreased SEC prices. The PV 10 of our total proved reserves was approximately $1 $6 billion as of year end, assuming SEC prices.

Paul D. McKinney: The PV10 of our total approved reserves was approximately 1.6 billion dollars as of year-end, assuming SEC. Turning to the balance sheet, we paid down an additional $3 million of borrowings on our revolver in the fourth quarter. The level of debt reduction was impacted by the final net payment for the founder's acquisition in December of approximately $11.9 million. I would note that through year-end 2023, we paid down $30 million of borrowings since the closing of the transaction in August, which had a final net purchase price of approximately $62 million. And finally, we entered 2024 with a liquidity of approximately $175 million, including a recently reaffirmed borrowing base of $600 million. Our debt at year-end was $425 million.

Turning to the balance sheet, we paid down an additional $3 million of borrowings on our revolver in the fourth quarter. The level of debt reduction was impacted by the final net payment for the founders acquisition in December of approximately $11 $9 million I would note that through year end 2023, we P.

Paid down $30 million of borrowings since the closing of the transaction in August which had a final net purchase price of approximately $62 million and finally, we entered 2024 with liquidity of approximately $175 million, including a recently reaffirmed borrowing base of six.

$100 million our debt at year end was $425 million. The company continues to remain focus on cash flow generation and reducing our debt.

Paul D. McKinney: The company continues to remain focused on cash flow generation and reducing our debt. Looking at our guidance for 2024, while Travis will go through more details in his comments, I wanted to provide a high-level overview and strategic rationale driving our full-year plans. The immediately accretive 2022 Stronghold and 2023 Founders acquisitions materially improved our size, scale, and drilling inventory. This backdrop provides key support and flexibility as we execute a 2024 drilling program specifically designed to organically maintain or slightly grow our oil production. Our current plan is to drill an average of five horizontal and six vertical wells per quarter. As in the past, we are focused on developing our highest rate of return inventory while also investing in necessary field infrastructure and other critical capital projects. For 2024, we are planning a two-rig phase drilling program, including one horizontal and one vertical rig. We are using a phased versus continuous drilling approach in 2024 to provide maximum flexibility to react to commodity price fluctuations and other market conditions in the current environment.

Looking at our guidance for 2024, while Travis will go through more details in his comments I wanted to provide a high level overview of strategic rationale driving our full year plans. The immediately accretive 2022 stronghold in 2023 founders acquisitions materially improved our size scale and drilling them.

Inventory.

This backdrop provides key support and flexibility as we execute a 2024 drilling program, specifically designed to organically maintain or slightly grow our oil production.

Our current plan is to drill an average of five horizontal and six vertical wells per quarter as in the past we are focused on developing our highest rate of return inventory, while also investing in necessary steel infrastructure and other critical capital projects for 2024 where plan.

A two rig phase drilling program, including one horizontal and one vertical rig we are using a phase versus continuous drilling approach in 2024 to provide maximum flexibility to react to commodity price fluctuations and other market conditions in the current environment.

Travis T. Thomas: After Travis provides his comments, I will come back with some additional thoughts on our business position and where we are headed. With that, I'll hand it off to Travis to discuss our recent financial results and outlook in more detail. Thanks, Paul, and good morning, everyone.

After Travis provides his comments I'll come back with some additional thoughts on our business position and where we're headed with that I'll hand, it off to Travis to discuss our recent financial results and outlook in more detail Travis.

Thanks, Paul and good morning, everyone.

Travis T. Thomas: Paul summed it all up nicely, but to further recap, our fourth quarter and full year 2023 operational and financial results materially benefited from our two acquisitions completed over the past 18 months. Also, driving our results was the successful execution of our 2023 drilling program, complemented by additional efficiencies achieved through our expanded scale and leveraging the best operational practices. We also executed targeted divestitures of non-core assets. We might sound like a broken record, but that's what we did.

Paul summed it all up nicely, but to further recap our fourth quarter and full year 2023 operational and financial results materially benefited from our two acquisitions completed over the past 18 months.

Also driving our results was the successful execution of our 2023 drilling program complemented by additional efficiencies achieved through our expanded scale and leveraging the best operational practices. We also executed targeted divestitures of noncore assets.

We might sound like a broken record, but that's what we did we broke records in the fourth quarter and full year of 2023, we had record sales volumes record adjusted EBITDA record adjusted cash flow from operations and record adjusted free cash flow.

Travis T. Thomas: We broke records. In the fourth quarter and full year of 2023, we had record sales volumes, record adjusted EBITDA, record adjusted cash flow from operations, and record adjusted free cash flow. So here are my takeaways.

So here are my takeaways.

Travis T. Thomas: We drove record adjusted EBITDA and adjusted pre-cash flow for Q4 and 2023 despite lower overall realized prices. Supporting our results was an 11% increase in Q4 sales volumes and a 47% increase in full-year sales volumes. We also focus on growing crude oil production as a percent of product mix given the enhanced economics and will continue to do so in 2024. We paid the final $12 million Founders Deferred Payment in December, and we were able to pay down $3 million on a revolver during Q4.

We drove record adjusted EBITDA and adjusted free cash flow for Q4, and 2023, despite lower overall realized pricing.

Supporting our results was an 11% increase in Q4 sales volumes at 47% increase in full year sales volumes.

We also focus on growing crude oil production as a percent of product mix given the enhanced economics and we'll continue to do so in 2024.

We paid the final $12 billion boundaries deferred payment in December and we were able to pay down $3 million on our revolver doing during Q4.

We have been extremely pleased with the results from the foundries acreage and through year end, we paid down $30 million of debt since closing on the transaction in mid August.

Travis T. Thomas: We have been extremely pleased with the results from Founders' Acreage, and through year-end, we paid down $30 million of debt since closing on the transaction in mid-August. With a net purchase price for founders of around $62 million, we are quickly recouping our investment. As in the past, we will continue to focus on paying down debt as fast as appropriate.

The net purchase price for founders of around $62 million were quickly recouping our investment.

As in the past, we will continue to focus on paying down debt as fast as appropriate.

Next we completed our successful 2023 development program. Our 2024 drilling program has been underway since January and we look forward to keeping our stockholders apprised of our progress.

Travis T. Thomas: Next, we completed our successful 2023 development program. Our 2024 drilling program has been underway since January, and we look forward to keeping our stockholders apprised of our progress. With that background, let's hit the other key highlights.

With that background, let's hit the other key highlights I'm going to focus my comments on the most important sequential quarterly results.

Benefited from a full quarter of production from our founders acquisition completed in mid August and a full year of production uplift and scale provided by the stronghold acquisition that closed in August of 2022 and.

Travis T. Thomas: I'm going to focus my comments on the most important sequential quarterly results. We benefited from a full quarter of production from our founders acquisition completed in mid-August and a full year of production uplift and scale provided by the Stronghold acquisition that closed in August of 2022. In addition, our ongoing field development efforts continue to drive further cost efficiency. During the fourth quarter, we sold 19,400 BOE per day at the higher end of our guidance range. Partially offsetting the increase in sales volumes was a lower overall realized price of $56.01 per BOE, a 4% decrease from the third quarter. Our fourth quarter average crude oil price differential from NYMEX WTI Futures Pricing was a negative $0.92 per barrel versus a negative $0.78 per barrel for the third quarter.

In addition, our ongoing field development efforts continued to drive further cost efficiencies.

During the fourth quarter, we sold 19400 Boe per day at the higher end of our guidance range.

Partially offsetting the increase in sales volumes was a lower overall realized pricing of $56.01 per Boe.

4% decrease from the third quarter.

Our fourth quarter average crude oil price differential from Nymex, Debbie Ti futures pricing was a negative <unk> 92 per barrel versus a negative <unk> 78 per barrel for the third quarter. This was mostly due to the rguest wty WTS the decreased $1 seven per barrel offset by the Rguest CMA role they increased by 85.

<unk> per barrel on average for the third quarter.

Our average natural gas price differential for mixed futures pricing for the fourth quarter was a negative $3 12 per mcf compared to a negative $2 45 per mcf for the third quarter.

Our realized NGL price for the fourth quarter averaged 14% of <unk> compared to 16% for the third quarter.

Travis T. Thomas: This was mostly due to the Argus WTI WTS that decreased by $1.07 per barrel, offset by the Argus CMA roll that increased by $0.85 per barrel on average for the third quarter. Our average natural gas price differential from NYMEX futures pricing for the fourth quarter was a negative $3.12 per MCF compared to a negative $2.45 per MCF for the third quarter.

The combined result was revenue for the fourth quarter of $99 9 million, let's call it an even $100 million.

A 7% increase from the third quarter, despite the lower overall realized pricing environment.

For full year 2023, we posted revenue of $361 million, almost a $1 million a day, a 4% increase year over year.

Hello, <unk> was $18 $7 million versus 18 million for the third quarter on a per BOE basis, LOE decreased sequentially, 6% in the fourth quarter to $10 50 versus $11 18 per Boe in the third quarter the <unk>.

Travis T. Thomas: Our realized NGL price for the fourth quarter averaged 14% of WTI compared to 16% for the third quarter. The combined result was revenue of $99.9 million for the fourth quarter. Let's call it an even $100 million, a 7% increase from the third quarter despite the lower overall realized pricing environment. For the full year of 2023, we posted revenue of $361 million, almost a million dollars a day, a 4% increase year over year. LOE was $18.7 million versus $18 million for the third quarter. On a per BOE basis, LOE decreased sequentially 6% in the fourth quarter to $10.50 versus $11.18 per BOE for the third quarter.

Absolute increase in <unk> was mostly driven by the full quarter at the founders assets, but the higher production reduced the per Boe rate.

I'd note that our Q4 LOE per BOE results were at the low end of our guidance of $10 50 to $11 per Boe.

Cash G&A, which excludes share based compensation and transaction related costs was $3 per Boe for Q4 versus $3 15 per Boe for the third quarter.

We are pleased to see a 24% year over year decrease in cash G&A per Boe cost.

Travis T. Thomas: The absolute increase in LOE was mostly driven by the full quarter of the founders' assets, but the higher production reduced the per BOE rate. I would note that our Q4 LOE per BOE results were at the low end of our guidance of $10.50 to $11 per BOE. Cash G&A, which excludes share-based compensation and transaction-related costs, was $3 per BOE for Q4 versus $3.15 per BOE for the third

Our fourth quarter results included a gain on derivatives of $29 million.

Versus a loss of $39 million for the third quarter.

You may recall, we discussed during our last call that prices at the end of the third quarter were higher which resulted in a mark to market derivative losses than the decline in prices in the fourth quarter reversed it to a mark to market gain.

We recorded an income tax provision of $7 9 million.

During Q4 2023.

Versus a benefit of $3 4 million in the third quarter, which was primarily associated with the increase in pretax book income.

Travis T. Thomas: We're pleased to see a 24% year-over-year decrease in cash GNA per BOE cost. Our fourth quarter results include a gain on derivatives of $29 million versus a loss of $39 million for the third quarter. You may recall we discussed during our last call that prices at the end of the third quarter were higher, which resulted in a mark-to-market derivative loss. Then the decline in prices in the fourth quarter reversed it to a mark-to-market gain.

Finally for Q4, we reported net income at $59 million or 26 cents per diluted share excluding.

Excluding the estimated after tax impact of pre tax items, including noncash unrealized gains and losses on hedges share based compensation expense and transaction costs, our fourth quarter. Adjusted net income was $21 2 million or <unk> <unk> per diluted share.

Travis T. Thomas: We recorded an income tax provision of $7.9 million during Q4 2023, versus a benefit of $3.4 million in the third quarter, which was primarily associated with the increase in pre-tax book income. Finally, for Q4, we reported net income of $50.9 million, or $0.26 per diluted share. Excluding the estimated after-tax impact of pre-tax items including non-cash unrealized gains and losses on hedges, share-based compensation expense, and transaction costs, our fourth quarter adjusted net income was $21.2 million, or 11 cents per diluted share. This is compared to the third quarter of 2023 with a net loss of $7.5 million, or a negative 4 cents per deleted share, and adjusted net income of $26.3 million, or 13 cents per deleted share. Moving to our hedge position. For 2024, we currently have approximately 2.1 million barrels of oil hedged, or approximately 45% of our estimated oil sales based on the midpoint of guidance. We also have 2.6 billion cubic feet of natural gas hedged, or approximately 43% of our estimated natural gas sales based on the midpoint.

This is compared to third quarter of 2023 with a net loss of $7 $5 million.

Negative <unk> <unk> per diluted share and adjusted net income of $26 3 million or <unk> 13 per diluted share.

Moving to our hedge position.

For 2024, we currently have approximately $2 1 million barrels of oil hedged for approximately 45% of our estimated oil sales based on the midpoint of guidance.

We also had $2 6 billion cubic feet of natural gas hedged for approximately 43% of our estimated natural gas sales based on the midpoint.

For a quarterly breakout of our hedge positions for 2024, please see our earnings release and presentation, which includes the average price of each contract type.

Turning to the balance sheet. Our primary focus remains the same reducing debt to better position ourselves to ultimately provide a meaningful return of capital to our shareholders.

At year end 2023, we have $425 million drawn on our credit facility with our recently reaffirmed borrowing base of $600 million, we had $174 $2 million available net of letters of credit combined with cash we had liquidity of $175 million with a leverage ratio of 162 times.

Slightly higher than year end 2022, despite additional borrowings for the foundries acquisition.

As a reminder from transaction completion in mid August of 2023 through the end of the year, we paid down debt by $30 million. Another clear indication of the cash flow generation supported by our significant asset base and our dedication to improving our long term financial profile.

Travis T. Thomas: For a quarterly breakdown of our hedge positions for 2024, please see our earnings release and presentation, which includes the average price of each contract type. Turning to the balance sheet, our primary focus remains the same, reducing debt to better position ourselves to ultimately provide a meaningful return of capital to our shareholders. At year-end 2023, we had $425 million drawn on our credit facility. With a recently reaffirmed borrowing base of $600 million, we had $174.2 million available, net of letters of credit.

To be clear, we will continue to pull all the levers at our disposal to further reduce our debt position, including driving further growth in operating cash flow through the successful execution of our targeted 2024 development program and further cost reductions.

Let's pivot to our 2020 for outlook.

In summary during 2024, we are utilizing a phased versus continuous drilling program approach that better maximizes our ability to react to changing market conditions and adjust spending levels as appropriate our focus is on maintaining or slightly growing Boe per day production levels, while continuing to grow our crude oil sales.

Travis T. Thomas: Combined with cash, we had liquidity of $175 million with a leverage ratio of 1.62 times, only slightly higher than year-end 2022, despite additional borrowings for the founder's acquisition. As a reminder, from transaction completion in mid-August of 2023 through the end of the year, we paid down debt by $30 million, another clear indication of the cash flow generation afforded by our significant asset base and our dedication to improving our long-term financial To be clear, we will continue to pull all the levers at our disposal to further reduce our debt position, including driving further growth in operating cash flow through the successful execution of our targeted 2024 development program and further cost reduction. Now, let's pivot to our 2024 outlook.

Yes.

We expect to spend $135 to $175 million.

Our full year development program, and anticipate capital spending between $37 million to $42 million for the first quarter.

We also anticipate full year 2020 for LOE to be between $10 50.

$11 50 per Boe and.

And between $10 75.

$11 25 for the first quarter.

All projects and estimates are based on assumed wty prices of 70% to $90 per barrel and Henry hub prices of $2 to $3 per Mcf.

So with that I will turn it back to Paul for his closing comments Paul.

Thank you Travis we view our record results for Q4 and full year 2023, as clear indications of the long term potential of our strategy the quality of our assets and our low breakeven cost of our undeveloped drilling inventory the opportunity provided by our expanded business plan.

Our focus remains the same as in the past.

Travis T. Thomas: In summary, during 2024, we are utilizing a phased versus continuous drilling program approach that better maximizes our ability to react to changing market conditions and adjust spending levels as appropriate. Our focus is on maintaining or slightly growing BOE per day production levels while continuing to grow our crude oil sales. We expect to spend $135 to $175 million on our full-year development program and anticipate capital spending between $37 to $42 million for the first quarter. We also anticipate full-year 2024 LOE to be between $10.50 and $11.50 per BOE and between $10.75 and $11.25 for the first quarter.

We will continue to pursue operational excellence and further cost efficiencies through the business both on the capital and operating cost fronts.

We will continue to high grade and execute our targeted drilling and development campaign focused on our highest rate of return prospects to.

Two organically maintain or slightly grow our production, while maximizing cash flow generation, we will continue to focus on improving the balance sheet by reducing debt.

We will continue to pursue growth through the evaluation and execution of acquisition opportunities to provide immediate accretion to our ring stockholders and improve our balance sheet. In summary, we remain committed to our value focus proven strategy, which we believe better prepare the company to manage the risks and uncertainties associated with our industry.

Should generate sustainable and competitive returns for our stockholders the focus of our strategy remains on achieving the necessary business size and scale that positions our company to sustainably returned capital to stockholders I want to take the time to thank our stockholders for their trust in us and for all of you who have joined us on the.

Paul D. McKinney: All projects and estimates are based on assumed WTI prices of $70 to $90 per barrel and Henry Hug prices of $2 to $3 per MCF. So with that, I will turn it back to Paul for his closing comments. Huh? Thank you, Travis.

Our call today.

With that we will turn this call over to the operator for questions operator.

We will now begin the question and answer session.

To ask a question you May press Star then one on your telephone keypad.

Paul D. McKinney: We view our record results for Q4 and full year 2023 as clear indications of the long-term potential of our strategy, the quality of our assets, and the low break-even costs of our undeveloped drilling inventory. The opportunity provided by our expanded business plan and our focus remains the same as in the past. We will continue to pursue operational excellence and further cost efficiencies throughout the business, both on the capital and operating costs front. We will continue to high-grade and execute our targeted drilling and development campaign focused on our highest rate of return prospects to organically maintain or slightly grow our production while maximizing cash flow generation. We will continue to focus on improving the balance sheet by reducing debt.

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To withdraw your question. Please press Star then two.

At this time, we will pause momentarily to assemble our roster.

The first question comes from Jeff Gramm with Alliance Global Partners. Please go ahead.

Good morning, guys. Thanks for the time.

Hey, Jeff.

You made it a point a few times in the release as well as on the call here to kind of differentiate between the states versus continuous drilling program just wanted to spend a minute there is that.

The management of the Capex spending and the pace.

Expect that to maybe create some lumpiness in quarterly production capital spending.

Paul D. McKinney: We will continue to pursue growth through the evaluation and execution of acquisition opportunities to provide immediate accretion to our Ring stockholders and improve our balance sheet. In summary, we remain committed to our value-focused proven strategy, which we believe better prepares a company to manage the risks and uncertainties associated with our industry and should generate sustainable and competitive returns for our stockholders. The focus of our strategy remains on achieving the necessary business size and scale that positions our company to sustainably return capital to stockholders.

And it sounds like the main benefit there is just to give you a little bit more nimbleness.

To manage the volatility in commodity prices, but yes.

Just any other additional commentary there would be helpful. Thanks.

Yeah, I'll do a first stab and then I'll turn it over to Marino.

Yes.

The thing that we're trying to manage right now is we're really trying to maximize our free cash flow generation and focus on paying down debt. If we keep a continuous rig go on all year long the burn rate brings us it increases our production, but it also.

<unk>.

Limits the amount of debt that we can pay down and so.

Operator: I want to take the time to thank our stockholders for their trust in us and for all of you who have joined us on the call today. With that, we will turn this call over to the operator for questions. Operator? We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key.

That's one consideration the other one is because of the volatility we've experienced over the last year actually several years.

We want to be nimble and we want to be able to respond and so by going with the phase drilling.

Contracts.

We can make decisions from quarter to quarter. The consequence of that is some quarters might be slightly higher than others. It's all a function of the timing of when you actually drill the wells and when you bring them on and so yes the.

<unk> may very well continue to be there you want to add anymore. No I just want to reemphasize that with the phase drilling program, we continue our rigs being well to well contracts. So we can we can stop at any moment, if we decide to or we can just continue extending the contract for.

Jeffrey Scott Grampp: To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Jeff Grampp with Alliance Global Partners. Please go ahead. Good morning, guys. Thanks for the time.

Future well so it gives us a lot of flexibility, which we like.

Great good to hear okay and.

Paul D. McKinney: You made it a point a few times in the release as well as on the call here to kind of differentiate between this phase versus continuous drilling programs, so I wanted to spend a minute there. Is that, you know, the management of the CapEx spending and the pace, do you guys expect that to maybe create some lumpiness in quarterly production capital spending? And it sounds like the main benefit there is just to give you a little bit more nimbleness to manage the volatility and commodity prices. But yeah, just any other additional commentary there would be helpful. Yeah, I'll do a first stab, and then I'll turn it over to Marino.

For my follow up return of capital, obviously remains a big goal that you guys continue to work towards.

I assume.

Durable balance sheet and large enough kind of operating scale are probably two of the bigger items that you guys are working on to kind of achieve ABA. Paul I'm curious are there any specific kpis that you guys are working towards in that regard or or anything else that you guys kind of measure that would I guess.

Kind of effectively gets you guys declined to that summit to a point, where you would be able to return capital to shareholders like what are the main kpis that we should be tracking towards to get you to that.

Paul D. McKinney: Yes, the thing that we're trying to manage right now is that we're really trying to maximize our free cash flow generation and focus on paying down debt. If we keep a continuous rig going all year long, the burn rate brings us – it increases our production, but it also – you know, limits the amount of debt that we can pay down. And so that's one consideration.

Yes, that's a really good question, we get that question pretty often actually we don't have at this point specified any specific kpis. We look at every opportunity out there. We know that there is a long term goal. We believe that the marketplace has made it very clear.

Paul D. McKinney: The other one is because of the volatility we've experienced over the last year, actually several years, we want to be nimble, and we want to be able to respond. And so by going with the phase drilling contracts, we can make decisions from quarter to quarter. The consequence of that is that some quarters might be slightly higher than others.

That.

Investors expect the oil and gas industry to return capital to their shareholders and so we're working on that right now.

We believe that our debt levels are just too high if we were to do a stock buyback or pay out a dividend.

Marinos Christos Baghdati: It's all a function of the timing when you actually drill the wells and when you bring them on. And so, yes. The lumpiness may very well continue to be there. Would you like to add any more?

The big issue there is as is our debt.

And so but with respect to a specific kpis.

I don't really.

Yeah, we haven't identified that.

That's fair I thought I'd try alright, guys for the time.

Marinos Christos Baghdati: No. I just want to reemphasize that with the phased drilling program, we continue our rigs on well-to-well contracts, so we can stop at any moment if we decide to, or we can just continue extending the contract for future wells. So it gives us a lot of flexibility, which we're working on. Great. Good to hear. Okay.

Yes.

The next question is from Neal Dingmann with Truest. Please go ahead.

Good morning, guys and nice results say, Paul My first question.

Good morning. My first question is on the founders assets specifically at this point it seems like they're doing quite good I'm just wondering as you.

Thank you and the team look at them today versus kind of what Theyre doing versus your initial estimates. So I'm. Just wondering can you maybe give me a broadband <unk>.

Paul D. McKinney: And for my follow-up, you know, return of capital obviously remains a big goal that you guys continue to work towards. I assume, you know, a durable balance sheet and a large enough kind of operating scale are probably two of the bigger items that you guys are working on to kind of achieve that. But Paul, I'm curious, you know, are there any specific KPIs that you guys are working towards in that regard, or anything else that you guys kind of measure that would, I guess, kind of effectively get you guys to climb to the summit to a point where you'd be able to return capital to shareholders? Like, what are the main KPIs that we should be tracking towards to get you to that? Yeah, that's a really good question. We get that question pretty often, actually.

Broad results Thats kind of what what has improved it certainly seemed like they have I'm just wondering maybe how they look since you. Initially we're looking at them and then secondly.

I'm just wondering when it comes to sort of completions.

What's changed is that is that what has improved and these are what's kind of been the improvement all of these assets.

Yes, again, Maria and I will both tackle this.

If you recall.

What our intentions were when we made the acquisition we wanted to get our arms around the operating cost and their production methods because we felt like we could make improvements across the board there and so we concentrated on the water handling initially and we also concentrated on the production practices.

Paul D. McKinney: We don't have, at this point, specified any specific KPIs. We look at every opportunity out there. We know that this is a long-term goal. We believe that the marketplace has made it very clear that investors expect the oil and gas industry to return capital to their shareholders, and so we're working on that. Right now, we believe that our debt levels are just too high.

We have moved water too.

And dispose of water differently because of.

We just believe that our operations could reduce costs and we've done that very successfully.

Paul D. McKinney: If we were to do a stock buyback or pay out a dividend— The big issue there is our debt. But with respect to a specific KPI, I don't really... You know, we haven't identified that. That's fair. I thought I'd try. All right. Thank you guys for your time. The next question is from Neal Dingmann with Truist. Please go ahead.

The other thing we wanted to do we spent quite a bit of time studying what has been done in the past in terms of drilling and completion practices. So that when we did go out there to drill and we have we've drilled several wells out there.

Premature to talk about them, but I have to say that were very very impressed with the results.

So.

Neal David Dingmann: Good morning, guys. Nice results. Paul, my first question is about the founders' assets. Specifically, it seems like they're doing quite well. I'm just wondering, as you and the team look at them today versus what they're doing versus your initial estimates, I'm just wondering, can you maybe give me a broad range of broad results of what has improved? It certainly seems like they have. I'm just wondering, maybe how they look since you initially were looking at them.

Overall, our impression of the founders acquisition is that it is going to over perform the forecast and the predictions we use when we first assess the value of it.

We also believe there is additional drilling locations out there now that we've looked at it closer than what we originally booked what we originally shared with our with our investors.

You wanted to go into any more detail now just just to say that our drilling and completion costs in the first two wells in the first quarter.

We've exceeded expectations, even the ones that we said.

Paul D. McKinney: And then secondly, I'm just wondering when it comes to completions, what's changed? Is that what has improved in these, or what's been the improvement on these assets? Yeah, again, Marino and I will both tackle this.

So lower costs are obviously going to improve the economics of those wells were very excited on the performance so far.

So when we first got our hands around the project our team did a really good job of identifying some small capital workovers, where we lowered our asp's closer to to drop the bottom hole producing pressures and that stabilized production significantly. So we're exceeding what we thought.

Paul D. McKinney: If you recall what our intentions were when we made the acquisition, we wanted to get our arms around the operating costs and their production methods because we felt like we could make improvements across the board there. So we concentrated on water handling initially, and we also concentrated on production practices. We have moved water to and Dispose of Water Differently because we just believe that our operations could reduce costs, and we've done that very successfully. The other thing we wanted to do, we spent quite a bit of time studying what has been done in the past in terms of drilling and completion practices so that when we did go out there to drill, and we have drilled several wells out there, it's kind of premature to talk about them, but I have So...

How we thought the assets for declining just on the base production. So we're very very happy and excited about the asset.

Yes, no great change in decline on that base rate is pretty substantial.

The work that they did this is just what I call the blocking and tackling of a very conscientious production engineering team they've done a great job evaluating things out there.

He mentioned lowering the pumps, but it's surprising aggregated the base production has responded so favorably to our operations and really have extended those declines so I'm really really happy with that acquisition.

Great to hear good details by the way guys and then my second question something you did talk about in the prepared press release, which is on the refracted workover opportunities I'm. Just wondering I think you had mentioned I assume this will continue to be pretty large part of your overall plan and if so are there specific areas that are.

Paul D. McKinney: Overall, our impression of the Founder's Acquisition is that it is going to overperform the forecast and the predictions we use when we first assess the value of it. We also believe there are additional drilling locations out there now that we've looked at it closer than what we originally booked and what we originally shared with our investors. Do you want to go into any more detail, Marinos?

More opportune for this.

Hi.

I don't know that we're really focused on re fracs Neal I will say that we are the things that we're tackling that where we've spent a lot of time, we're trying to remove all of the infrastructure limitations to programs in both the north and the northwest shelf also in the Central Basin platform.

Marinos Christos Baghdati: No, just to say that, you know, our drilling and completion costs on the first few wells in the first quarter have exceeded expectations, even the ones that we set. And so lower costs are obviously going to improve the economics of those wells. We're very excited about the performance so far. Also, when we first got our hands on the project, our team did a really good job of identifying some small capital workovers where we lowered our ESPs closer to drop the bottom hole producing pressures, and that stabilized production significantly. So we're exceeding what we thought, how we thought the assets were declining just on base production. So we're very, very happy and excited about the asset. Yeah, and that change and decline on that base rate are pretty substantial.

Portion of the northern and legacy assets and also in the south because all of these areas have very very economic.

Drilled opportunities and freeing ourselves from those limitations gives us more flexibility in terms of where we spend the capital.

And so.

The primary thing that we've been working on instead of re Fracs is really eliminated infrastructure and then like millennials kind of pointed out also reducing.

Reducing cost and so the point that he made about the first couple of founders wells, we drilled out there.

We believe that we can drill them cheaper than the than the boundaries organization, we're drilling them and then how our actual costs are actually coming in substantially less than what we actually <unk>. So we're very happy with all the efforts is a combination of change.

Marinos Christos Baghdati: The work that they did was just what I call the blocking and tackling of a very conscientious production engineering team. They've done a great job evaluating things out there. And like he mentioned, lowering the pumps, but it's surprising, actually, that base production has responded so favorably to our operations and really has extended those declines. So I'm really, really happy with that acquisition. It's great to hear. Good details, by the way, guys. And then my second question, something you've been talking about in the prepared press release, which is on the refract and work over opportunities. I'm just wondering, as you mentioned, I assume this will continue to be a pretty large part of your overall plan, and if so, are there specific areas that are, you know, more opportune for this? I don't know that we're really focused on refracts, Neal.

Changing making changes to the way, we do things and also the impact and the effect of the change in the projector of inflation. So costs on many things have come down and so there's a variety of things that allowed us to perform as well as we are.

Yes that makes sense at that site and then it takes on it and then all of that infrastructure. That's the point that was getting net are you now getting to a point, where you think moshe and structure is built up or is that built out or is that something that will go on most of this year still.

Yes, Sir.

Theres a few batteries that we have to build based on our 2024 capital program, but in general all the bottlenecks.

That we were facing when we first especially down in the south when we first took over the assets, we've pretty much knocked out and Thats really helped a lot on the capital efficiency that we've been seeing and then we've also.

Paul D. McKinney: I will say that we are, the things that we're tackling that where we're spending a lot of time, trying to remove all of the infrastructure limitations to programs in both the north and the northwest shelf, also in the central basin platform portion of the northern and legacy assets, and also in the south, because all of these areas have very, very attractive undrilled opportunities, and freeing ourselves from those limitations gives us more flexibility in terms of where we spend the capital. And so I think the primary thing that we've been working on, instead of refracting, is really eliminating infrastructure and then, like Marinos kind of pointed out, also reducing costs. And so the point that he made about the first couple of founders wells we drilled out there, we believed that we could drill them cheaper than the founders organization was drilling them.

Emphasized to the backbone.

What I consider the backbone of our organization to boots on the ground guys in the field.

Taking ownership of our operations and making it there as to where they're looking at a little bitty things that.

One at a time don't really significantly change things, but when you add everything together, we're seeing significant improvements in our operational efficiency and in conducting our operations safely. So we're really proud on how we're generating the culture.

Great details thanks, Scott so much.

Yeah.

The next question is from Noel Parks with toll brothers. Please go ahead.

Hi, good morning.

Hey, good morning Noel.

Just a couple of things you mentioned a few minutes ago that you.

Believe that there are going to be some additional drilling locations out there than you had originally modeled and I was wondering that is that a function of density or just a function of.

Paul D. McKinney: And then now our actual costs are actually coming in substantially less than what we actually AFE them for, so we're very happy with all the efforts as a combination of making changes to the way we do things and also the impact and effect of the change in the projection of inflation. So costs on many things have come down. So it's a variety of things that have allowed us to perform as well as we are. Yeah, that makes sense. That's fine, man. Thanks. And then on that infrastructure, that's the point I was getting at. Are you now getting to a point where you think most of the infrastructure is built up? Or is that already built out? Or is that something that will go on for most of this year still?

It was just the size of the individual targets here Youre finding.

Yes, that's that is pushing the boundaries out a little bit on the area that is developable and also includes additional downspacing. So it was both.

Okay, great great.

Okay and.

I did notice speaking of locations that are.

In the reserve breakout in.

In the PD M P category.

It seemed that the.

Marinos Christos Baghdati: Yes, sir. There are a few batteries that we have to build based on our 2024 capital program, but in general, all the bottlenecks that we were facing when we first took over the assets, especially down in the South, have pretty much been knocked out. And that's really helped a lot with the capital efficiency that we've been seeing. And then we've also emphasized the backbone of what I consider the backbone of our organization, the boots-on-the-ground guys in the field, taking ownership of our operations and making them theirs, so that they're looking at little bitty things that... One at a time don't really significantly change things, but when you add everything together, So we're really proud of how we're generating that culture. Great details. Thanks, guys, so much. The next question is from Noel Parks with the Twohy Brothers. Please go ahead. Hi, good morning. Hey, good morning, Noel.

Just the aggregate appeared.

A little gas here and I'm, just wondering is that due to.

Production mix in.

In locations in.

A particular area or or anything in particular.

The attribute that to.

Yes, if you go.

If you recall the stronghold.

Acquisition.

Brought more gas more associated gas production.

Okay.

To our portfolio and the founders acquisition is now.

<unk> getting more bringing us back to be more oily.

So.

Alright.

I'll also say to that especially in the founders we've really focused again on that.

<unk> operations, and we've actually been able to.

Increase our gas production or sales compared to the.

The previous team.

The founders that had the asset. So that's also slightly increased or gas to oil ratios there.

Okay, great. Thanks, a lot.

Noel Augustus Parks: Just a couple things. You mentioned a few minutes ago that there are going to be some additional drilling locations out there than you had originally modeled. Is that a function of density or just a function of the size of the individual targets here you're finding?

Again, if you have a question. Please press Star then one.

Next question is from Jeff Robertson with water Tower Research. Please go ahead.

Paul D. McKinney: Yeah, that is pushing the boundaries out a little bit on the area that is developable and also includes additional downspacing, so it's both. Okay, great, great. Okay. And, um...

Thank you good morning.

Paula Marinos you've mentioned.

Fourth quarter 'twenty three that you had some performance that helped.

Hum production I think especially on oil was that related to well performance Marino so or is that related to some of the field operations that you all started to implement on the acquired assets and can you talk about how that plays into the guidance that you have out for 2024.

Paul D. McKinney: I did notice, speaking of locations, that in the reserve breakout, in the PDMP category, it seemed that the..., just the aggregate appeared a little gassier. And I just wondered, was that due to, you know, just production mix in locations in a particular area or anything in particular that you attribute that to? Yeah, if you go, if you recall, the stronghold acquisition brought more gas, more associated gas production, to our portfolio, and the founder's acquisition is now, you know, getting more, bringing us back to be more oily. I will also say, too, that especially with the founders, we've really focused, again, on the field operations, and we've actually been able to increase our gas production or sales compared to the Okay, great. Thanks a lot. Again, if you have a question, please press star then 1. The next question is from Jeff Robertson with Water Tower Research. Please go ahead.

Sure in the first part of your question, it's a little bit of both we've continued in the fourth quarter. We developed some horizontal wells in the central basin platform and our legacy Andrews area that.

Outperformed expectations I would say, but.

And need the base production, we were able to.

Do a little bit better than anticipated because of we didn't really have a lot of cold weather in the fourth quarter of 2023, but we did experience. Some in the first month of 2024 in January.

We had a really about 12 days of a really strong cold front comes through that affected our production early on in the quarter and that led to a little bit of what we guided towards.

I hope that answers the question.

There is a couple of other things, Jeff and this goes back to the Lumpiness of a continuous.

Versus.

A phased drilling program. If you recall, we were a little disappointed in our production levels last summer and so at the towards the end of the year. We went to a continuous program to try to catch up and so the timing of go into that continuous program really helped us out in the fourth quarter and that kind of boosted the production.

Jeffrey Woolf Robertson: Thank you. Good morning. Paula Marinos, you mentioned in fourth quarter 23 that you had some performance that helped production, I think, especially on oil. Was that related to well performance, Marinos, or was that related to some of the field operations that you all started to implement on the acquired assets? And can you talk about how that plays into the guidance that you have out for 2024? Sure. In the first part of your question, it's a little bit of both.

So again that goes back to managing continuous versus phase drilling.

But so the fourth quarter actually benefited from from additional drilling that occurred in the third quarter, where those wells came on in the fourth quarter.

Paul The way you constructed your 2024 development plan it sounds like you're focusing more on.

Marinos Christos Baghdati: We continued in the fourth quarter. We developed some horizontal wells on the Central Basin Platform in our legacy Andrews area that outperformed expectations, I would say. But, in base production, we were able to do a little bit better than anticipated because we didn't really have a lot of cold weather in the fourth quarter of 2023, but we did experience some in the first month of 2024, in January. We had about 12 days of a really strong cold front come through that affected our production early on in the quarter, and that led to a little bit of what we guided towards. So I hope that answers the question.

Higher margin oil production does that mean you are you.

Will it be a noticeable or material impact on.

Free cash flow per dollar of capital spent as you think about how that capital program for 24.

It works out and the ability to delever over the course of the year.

That's exactly right. So we are focused on maximizing our free cash flow generation of one of the things that we've learned especially in with natural gas prices, where they are with the discounts to the wellhead, where we're actually having to pay to take gas we're laser focused on Mac.

Maximizing our oil production.

To maximize our free cash flow generation, so that we can pay down debt.

Thank you.

This concludes our question and answer session I would like to turn the conference back over to Paul Mckinney for any closing remarks.

Thank you operator, well hey on behalf of the management team and the board of directors I want to thank everyone for listening and participating in today's call. We appreciate your continued support of the company and we look forward to keeping everyone apprised of our progress. Thank you again for your interest in ring and have a great day and have a great weekend.

Paul D. McKinney: Yeah, there are a couple of other things, Jeff, and this goes back to the lumpiness of a continuous versus a phased drilling program. If you recall, we were a little disappointed in our production levels last summer, and so towards the end of the year, we went to a continuous program to try to catch up. And so the timing of going to that continuous program really helped us out in the fourth quarter, and it kind of boosted production. And so again, that goes back to managing continuous versus phased drilling. So the fourth quarter actually benefited from additional drilling that occurred in the third quarter, where those wells came on in the fourth quarter. Paul, the way you constructed your 2024 development plan, it sounds like you're focusing more on higher-margin oil production.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

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Paul D. McKinney: Does that mean you are you? Will it be a noticeable or material impact on Free cash flow per dollar of capital spent as you think about how the capital program for 24 works out and the ability to de-lever over the course of the year? That's exactly right. So we are focused on maximizing our free cash flow generation, and one of the things we've learned, especially with natural gas prices where they are, with the discounts to the wellhead where we're actually having to pay to take gas, we're laser focused on maximizing our oil production to maximize our free capital generation so we can pay down debt.

Paul D. McKinney: Thank you. This concludes our question and answer session. I would like to turn the conference back over to Paul McKinney for any closing remarks.

Paul D. McKinney: Thank you, operator. Well, hey, on behalf of the management team and the board of directors, I want to thank everyone for listening and participating in today's call. We appreciate your continued support of the company, and we look forward to keeping everyone apprised of our progress. Thank you again for your interest in Ring, and have a great day and have a great weekend. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. © BF-WATCH TV 2021, ?? ?? ?? ?? ?? ?? ?? ?? © BF-WATCH TV 2021, ?? ?? ?? and no one else.

Yeah.

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