Hi everyone, welcome to NorAm Drilling's fourth quarter results presentation. With me today, I have the company's CEO and CFO, Mr. Marty Jimmerson, with me from Houston. We will go through a presentation of the quarterly results before we have some recent market development slides. Then we'll open up for a Q&A session in the end. Before we begin our presentation, I would like to note that this conference call will contain forward-looking statements. Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. Forward-looking statements are not guarantees of future performance. These statements are based on current plans and expectations and are inherently subject to risks and uncertainties that could cause future activities and result or operations to be materially affected, different from those set forth in the forward-looking statements. You should therefore not place undue reliance on these forward-looking statements. With that, I would like to invite Marty Jimmerson to speak. Go ahead, Marty. Thank you, Marius, and good morning and good afternoon to all of our participants joining our Q4 performance review. Let me start by saying our Q4 performance met or exceeded our expectations and continued to show momentum as we stepped off into 2023. We reported $29.5 million of revenue in the fourth quarter, which was up 11% sequentially from the third quarter. Our day rate increased to $28,000 compared to $25,200 in the third quarter. Additionally, our utilization improved to 99.3% compared to 98.9% in the third quarter. We did, during the fourth quarter, transition a one rig from one client to another without any downtime, showing the strength of the market. Most of you may have already noted that Diamondback announced and acquired Firebird Energy during the fourth quarter. We had three, or the only three rigs working for Firebird Energy, bringing the total number of rigs working for Diamondback at the time of the announcement of the merger or acquisition of Firebird to four. During the fourth quarter, we contracted two of the four rigs with an additional new customer. The rigs remained working for Diamondback through the end of the year and into the early part of January and is now on contract. Both rigs are on contract for the new customer. We have two rigs currently working for Diamondback, and we continue to receive inquiries asking if any of the rigs working for Firebird are available. During the fourth quarter, we reported EBITDA of $11.4 million, which included a non-cash stock expense charge of $400,000. As you'll note in our report, our interim report, we are reporting adjusted EBITDA for the first time, which simply adds back this non-cash charge. Our adjusted EBITDA of $11.8 million in the fourth quarter increased 39% from the third quarter. Let me just turn to our backlog, wrapping up this slide. We did end the quarter with $39.9 million of contractual backlog. Since the end of the fourth quarter, we have renewed one contract so far in 2023. We anticipate another four to five additional contracts will be renewed before the end of the first quarter. Contract terms are expected to remain in the short- term range and will typically be somewhere between three and six months. Next slide, please. We're very pleased to report that since our initial monthly dividend that we commenced in December, we have now distributed over $13 million or NOK 3.05 per share. Our most recent monthly dividend was increased to NOK 1.05 per share. We continue to see day rates increasing as we move into 2023. As noted, we've already renewed the one contract, and we are currently in discussions for renewals, and those rates are higher than what we earned during the fourth quarter. As you know, NorAm is exclusively focused in the Permian Basin. The Permian Basin currently represents roughly 50% of the total U.S. rigs working. Additionally, Super Spec rigs are effectively sold out. Yes, there could be some additional rigs that are reactivated that are currently idle. As some of you may know, natural gas prices have declined from roughly $7 per BTU, million BTU in November, to a little over $4 at the end of 2022, and currently sits in the low $2 range. The Eagle Ford and the Haynesville are primary basins for natural gas drilling, and those two basins have collectively increased the rig count 29 rigs year- over- year as of this past Monday. That suggests that, you know, should there be continued low gas prices, there could be rigs that are released by operators, and there could be rigs that are possibly relocated to the Permian Basin to take advantage of the oil drilling. It could impact the near term supply in the Permian, but we remain optimistic in the long-term fundamentals of both the Permian and the U.S. land drilling market. We continue to see financial discipline being demonstrated by the operators and the drillers. Next page, please. We continue to believe there are strong market fundamentals driving the demand in the Permian. On the left side, DUCs have continued to decline and have declined over 70% since mid-2020. Over the last several months, we are starting to see a flattening of the remaining DUCs available in the Permian. Over the last two months, there's actually been an increase month-over-month of one or two DUCs. You might be seeing this trend change. We remain steadfast that we believe the remaining DUCs of 1,000 may never get drilled for various reasons. They could be uneconomical, or they just may not be in a position to be completed. We actually have one customer who have told us that they have no remaining DUCs. For them to maintain their production, they will have to continue to drill, which we believe bodes well for NorAm. On the right, our efficiency of our Ultra Super Spec fleet and the standardization of it continues to demonstrate our operational excellence compared to the industry average. Next page, please. Just wrapping up here, we just wanna reiterate that we believe the long-term market fundamentals look favorable for NorAm, and the decline in the DUCs, plus the lack of meaningful near-term capacity that could come into the market will continue to benefit NorAm as we move forward. Marius, with that, would you mind taking the next couple slides? Yes. Thank you, Marty. In the fourth quarter, on the left-hand side, all of our rigs were on contracts, and we achieved a rig utilization of 99.3%, up from 98.9% in the third quarter. We earned an average day rate of approximately $28,000 per day, up 11% from the preceding quarter. Note that our day rate is adjusted for reimbursables or so-called out-of-pocket expenses of $1.3 million in this quarter. On the cost side, we paid operating expenses in line with the expectations, another relatively flat development quarter-on-quarter. We do not foresee any major inflation in costs for 2023 as of this date. On the right-hand side, we show our income statement for the quarter. Revenues came in at $29.5 million. We had an adjusted EBITDA of $11.8 million, adjusted for non-cash cost of $0.4 million. We had financial income of $1.5 million in the fourth quarter, which is primarily related to interest income and favorable FX movements on the proceeds from the IPO. As a result, we reported a net profit of $9.3 million or $0.22 per share. Next slide, please. Turning over to the balance sheet, NorAm paid down all of its outstanding debt during the fourth quarter and is now debt-free. We ended the quarter with a cash position of $13.1 million. During the fourth quarter, we signed an RCF with a U.S. bank providing for $4.5 million of working capital financing. However, at the end of the quarter and as of this date, there's no outstanding amounts under this facility. Going forward, we intend to use this facility as a means to reduce the amount of liquidity we need on the balance sheet in between dividend payments. With that, I will thank you all for listening to the presentation, and we would now like to open up for a Q&A from the audience. Thank you. I can take the first question on the Q&A here is from William. He asks, "At what rate level would you consider locking in rigs for a longer period to an operator? And what is the highest rate currently running on one of your rigs? Thank you, Marius. Great question. Certainly we're gonna strive to achieve the highest day rates possible. We do intend to keep our contracts, short-term in nature, typically three to six months, as we believe the long-term fundamentals of the business will continue to benefit NorAm. We do not currently have any ongoing discussions for contract terms beyond six months. We do have two rigs that are on one-year contracts, essentially, that come up in the middle of the year that could be possibly renewals for one year. It's just an economic decision that we've got to balance between getting backlog and making sure that any rates that we enter into in what we believe to continue to be an improving market over time, that we don't short side ourselves. I don't wanna comment specifically on the highest day rate that we have. You can, you know, see our current through our last report that our average fleet day rate is now in excess of $30,000. We expect that to continue to improve. Let me just finish answering the question. You know, we do get a sense that the first half of the year, we do expect day rates to continue to increase. However, they may not increase at the same pace with which we experienced in 2022. There will be some moderation of the increases, at least through the first half of the year. We look forward to the back half of the year, as we move forward. Thank you, Marty. We have another question here from Thomas Larson, and he says, "Hi, congratulations on good results. Could you please give some color on the break-even level that rig day rate needs to be in order to maintain the current dividend levels? As a follow-up, is $28,000 per day above or below historical averages? Many thanks. Great. Well, we appreciate the kind commentary there and the certainly the question. As we look at our results for the fourth quarter, our operating cost of $14,400 were certainly in line with our expectations, maybe a tad higher. Our overhead, both at the operational and corporate levels, of roughly $1,900 a day, and then we factor in our maintenance CapEx. There. You know, this is a difference between us and our other public company peers that we typically expense, certain items that other, some of our competitors, capitalize. Not that there's any difference in accounting treatment, it's just a kind of philosophy, if you will. We believe that kind of if you all in, around $16,700 a day at current day rates, we would anticipate being able to maintain the existing dividend. As rates continue to improve, we would hope that we would be able to continue to increase the dividend as we move forward. Thank you, Marty. It appears that there are no further questions, I will keep it open for another minute if there are any other people out in the audience that have any questions to us. There's in this Teams. Yeah. Well, here we got another one. "Are you planning any rig expansion or really focus on capital generation and distribution? Which would you prefer?" All right, Marty, I think I can handle this one. At NorAm Drilling, we do not have any growth ambitions. The only growth ambitions we have is to grow the dividends per share. I'll leave it at that. All right. There appears that there are no further questions from the audience. I would like to thank you all for listening in. On behalf of Marty and the team in Houston. All right, another one. It's from anonymous. "What stage are your rigs? Do you need any major maintenance?" Marty? I'm not sure what we mean by what stage, but, you know, our rigs overall are now averaging a little over nine years in age per rig. Our maintenance program is a very thorough and complete program. We continue to meet our recertification requirements, and we believe that as a result of our maintenance program, that leads to the efficiency of our operating cost structure. We've always had some type of repair to a mud pump or top drive. We don't see any major maintenance expenses out of the normal course of business and conduct. We are completing our final Ultra Super Spec upgrade, increasing the racking capacity on one of our rigs, and adding some FR120 pipe handling systems. Thereafter we're essentially complete on our upgrades. That's why we believe our maintenance CapEx will continue to be minimal as we move forward compared to our competitors. All right. We got a bunch of questions now. We'll start with another one. That relates to rigs in Haynesville. Have you started to see any rigs from the Haynesville make it to the Permian? Great question. It's something that I think about and look at every day. I would add the Eagle Ford in there. What I'll tell you is we're not seeing it currently in the stats. You know, the Baker Hughes rig count last week, both the Haynesville and the Eagle Ford were flat. We are hearing anecdotally that some customers are expecting that the smaller private operators may start releasing rigs as we move forward. We've not seen a high concentration or major announcements of that. There is differing degrees of information that we are hearing that the rigs may stay in the Haynesville looking for work, they may be moved to the Permian, or they may be moved to other areas. We're monitoring it closely. We do think that it's certainly possible that we'll see some rigs move to the Permian, but we, you know, we believe that that probably could or will offset any kind of projected rig reactivations that were possibly anticipated in 2023. Thank you. Thank you, Marty. We have another one here from Will M. At what level of cash on the balance sheet would you consider a special dividend? I can take that one. I do not expect us to pay any special dividend. We will distribute any excess earnings above our all-in cash break-even. We will strive to maintain a minimum liquidity of $11 million, which is including the $4.5 million RCF. That, without giving any further guidance, that's the level we try to navigate at. The next question is any comments on your share price? All brokers have much higher price targets. On a general basis, we do not comment much on the share price. We see that we have received a lot of new shareholders during since last time we reported the financial figures, that's something we appreciate. Last time we checked, we were at around 1,700 shareholders, up from around 100 when we IPO'd, that's something we appreciate. We have no further comments to our share price. Another question from Thomas Larson. Could you give some color on your customer concentration if possible? Thanks. I'll leave it to you, Marty. Yeah. We're very pleased with our customer concentration. While we love Diamondback as a customer, when they announced the Firebird acquisition, you know, I do think it makes sense that you've gotta ask yourself, does it make sense to have over a third of your fleet working for one customer? We were very pleased to get two of our rigs transition to another new customer. We currently have three rigs working for one other customer who we've been working for since 2016. We're very comfortable with our customer concentration, our mix of major and private operators, and quite frankly, kinda like right where we sit today. Thank you. another question here on the, some analysts are calling for, 30-40 gas-focused rigs being dropped in various gas basins. If we see something like this, could oil basins absorb this much supply in, the calendar year 2023? The way we think about it, as I mentioned earlier, between the Haynesville and the Eagle Ford, there's 29 rigs that have increased year- over- year. If you just kinda take that and extrapolate that, you can see what the analysts are saying, 30-40 rigs. There's currently a little over 350 rigs working in the Permian. Hypothetically, if let's say the number's 40 that get released, if all 40 of them show up in the Permian, you know, that's a little over a 10% increase in the supply. Do I think all of them can find work on day one? No. Do I think that they could displace or mitigate the rigs that are possibly being contemplated to be reactivated? I think that's a possibility. That would be absorption that I think would be good. I also still think that of the 350 rigs working in the Permian, not all of those are kinda high-end, Super Spec rigs like ours, and those rigs could certainly displace some of the lower end or, yeah, not as efficient rigs as ours. That's why we've kinda stated upfront that near term there could be some supply coming into the Permian. We think we'll work through it, and we're encouraged about the back half of 2023. Thank you. Thank you, Marty. Two questions left. I will actually combine them. What is your strategy with regards to the share price? Will you be attending investor conferences in the U.S.? The same person ask if we are considering listing in the U.S. Well, Marty, you are obviously close to U.S. investors being based in Houston. We have several of our investors in the IPO who are U.S.-based, and we have frequent dialogue in connection with financial reporting such as this to meet investors in person and also on investor conferences. In general, we have a quite frequent dialogue with prospective and current investors. Regarding a potential listing in the U.S., that's not something we consider for the time being. We see that there are major benefits by being listed in Oslo on Euronext Growth, having low cost to maintain the listing and also a quite lean infrastructure to support our listing. We do not consider any listing in the U.S. for the time being. The final question here comes from the same person. Many E&Ps have commented on their earnings calls last week that services pricing hasn't moved in step with the commodity prices which have come down. What do you think is a sustainable day rate level for the rig operators? Marty, I leave it to you. Good question. You know, we think that the operators' break- even, is, depending on who you talk to, is somewhere in the, you know, 50s, but more likely the low $60 price per WTI. We continue to represent only 10%-15% of the cost of a well being drilled. While we are a number, we're not the major item. Therefore, we're confident that, at current day rates and current WTI pricing that the need to continue to drill to continue to maintain the production as the DUCs have declined, we think the day rates will continue where they're at and should continue to increase for the near term. All right, another question here that popped up from anonymous. Can you please elaborate a little on rate expectations going forward? From my understanding, the rates are ticking upwards. Nabors, Patterson-UTI, and so on are all talking about rates up to $40,000 a day. In addition, can you elaborate a little bit on the expected level of new signings with rates in the area of $35,000-$40,000 per day? Is it likely that you will increase the dividend going forward? Thanks. It's a very long question, Marty. Yeah, we certainly support increasing day rates. You know, where some of the competitors have mentioned leading edge rates of $40,000, we're not necessarily certain that those rates are being earned in the Permian. Secondly, that rate probably includes additional services and/or equipment that we either don't provide or our customers don't need. I would encourage you to continue to focus on what we refer to as a clean day rate, which includes our clean operating expenses. You know, when you look at our direct margin per rig, less our overhead and our maintenance CapEx per day, we are the leader in financial efficiency per day, given our operating cost structure. Just like our competitors, our day rates did increase during the fourth quarter, to 11%, by 11%. We think we're very much in line. The leading edge numbers of $40,000, we're not saying they're anomalies, but we don't think that's the going day rate in the Permian. We continue to think the day rate's gonna increase in the Permian. As we mentioned earlier, it may moderate some. The pace of the increases may moderate some here in the early part of 2023. We're certainly expecting that they'll continue to increase and the pace may continue to increase. Again, for there to be a new rig build or a significant reactivation of rigs, the inventory's getting such that the cost to reactivate rigs is very prohibitive. The discipline being maintained by the. our competition is gonna result in the rigs that are currently working will continue to work. Our customers, we believe they're uncomfortable releasing a rig because there are effectively no available rigs. If you were to release our rig, and you needed to pick up another rig next week, your day rate would possibly be higher than what you're paying us right now. Thank you. I think there's another question here from Chris. It's an interesting question. Some analysts are arguing that the huge production growth from the U.S. in 2024 will weaken the oil price going forward. How will this affect NorAm Drilling? I assume such production growth will demand a lot of rigs. I certainly agree with the latter. Yeah. We definitely agree. You know, and I think you've got some other global macro events that are coming into play. You know, I would think the U.S. economy should be better in 2024 than in 2023. China's coming online. If there's gonna be an increase in production, there will need to be more rigs working. I also think, and would encourage everyone to think back, you know, our customers are maintaining their financial discipline, and they're gonna return money to their shareholders. The CapEx, and most of the CapEx plans of the operators that we've seen in 2023, while they are budgeting an increase in CapEx, the majority of that increase is cost inflation, not necessarily adding more rigs. What we're seeing right now is that most, if not all, of the operators are maintaining their current rig count. They're talking about adding rigs in the second half of the year, but it's early in the year, and nobody knows what's gonna happen just yet in the back half of the year, nor 2024. All right. Thank you for that, Marty. With that, we've 15 questions. I thank you all in the audience for being so active in the discussions. We look forward to the next monthly reports and the next quarter. On behalf of the team in Houston, we would like to thank all NorAm employees for their efforts during the quarter, and we look forward to another successful 2023. Thank you all for attending the conference.