Good day, and thank you for standing by. Welcome to the HighPeak Energy 2025 fourth quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Steven Tholen, CFO. Please go ahead. Good morning, everyone, and welcome to HighPeak Energy's earnings call. Representing HighPeak today, our President and CEO, Michael Hollis, Executive Vice President, Ryan Hightower, Executive Vice President, Daniel Silver, Senior Vice President, Chris Mundy, and I'm Steven Tholen, the Chief Financial Officer. During today's call, we may refer to our March investor presentation and press release, which can be found on HighPeak's website. Today's call participants may make certain forward-looking statements relating to the company's financial condition, results of operations, expectations, plans, goals, assumptions, and future performance. Please refer to the cautionary information regarding forward-looking statements and related risks in the company's SEC filings, including the fact that actual results may differ materially from our expectations due to a variety of reasons, many of which are beyond our control. We will also refer to certain non-GAAP financial measures on today's call, so please see the reconciliations in the earnings release and in our March investor presentation. I will now turn the call over to our President and CEO, Mike Hollis. Thank you, Steve. Good morning, everyone, and thank you for joining us. I thought about kicking off things today by walking through our 2025 results and the execution of our business plan. That feels like a whole different world today. I'm far more energized by what lies ahead than by revisiting what's already behind us and implemented. For anyone interested in a deeper look at the changes that brought us to this point, our prior quarter's investor presentation and earnings call transcript offer a comprehensive overview. With that, let's turn the page and talk about 2026 and how we're positioning the company to move forward with purpose, confidence, and a whole lot of momentum. In today's fast-moving geopolitical and commodity landscape, we are approaching 2026 with focus and discipline. Our focus is clear. Protect profitability, maximize cash flow, and strengthen the foundation of our business, not pursue growth for its own sake. Over the past several quarters, we have taken a hard, honest look at every part of our business, and that work continues today. It has given us a firm handle grounded on financial discipline and operational excellence. This means a plan we can fully and confidently execute within cash flow, sustaining stable production with minimal capital intensity and driving further efficiency gains to expand margins. Our top financial priority is strengthening the balance sheet. As commodity prices rise, incremental cash flow will be directed first toward debt reduction and liquidity improvement. To support that objective, we're taking several decisive steps. First, we right-sized our annual capital budget to ensure our development program stays within cash flow, even in a much softer price environment. Second, we expanded our hedging program to reduce exposure to volatility and secure pricing that supports continued investment and debt reduction. Third, we suspended our dividend, which will increase annual liquidity by an estimated $20-$25 million. The reality is the market wasn't giving us credit for the dividend, and most of the investors we speak with regularly have shared that same perspective. We believe that capital is far better deployed, strengthening the balance sheet and building long-term value for our shareholders. We are positioning the company to thrive, not just for the next couple quarters, but for years to come. Our 2026 development plan is intentionally conservative and built for durability. It is anchored around one drilling rig and roughly one completion crew, which positions us to drill about 30 wells and bring 36-38 wells online over the course of the year. We designed this pace of development with three clear objectives in mind. First, to ensure we operate fully within cash flow, covering every financial obligation, even if oil prices settle in the mid- to upper 50s. Second, to maximize free cash flow in a stronger commodity environment so we can accelerate debt reduction. Third, to maintain strict cost discipline across the organization. Given the recent strength in oil prices, this is an opportune time for us to lean into debt reduction and continue improving our financial footing. Our 2026 program also reflects a balanced approach between investing in new wells and optimizing our existing base production. You can see that balance clearly in our capital allocation. Our capital budget is nearly 50% lower than last year, while unit lease operating expenses per BOE are modestly higher as we invest in targeted initiatives to enhance base production. The result is a development program built for capital efficiency, highlighted by an estimated 65% increase in production per dollar invested. The early results are encouraging. Quarter to date, production is averaging more than 46,000 BOE per day. That is roughly 10% above the midpoint of our 2026 guidance range, even after accounting for the impacts of Winter Storm Uri. Based on today's market environment, we believe production in the low to mid-40,000 BOE per day range represents a sustainable baseline for our 2026 budget and our plans to reduce absolute debt. Stepping back, it's important to recognize how the market is valuing companies like ours today. In the current environment, mid-cap E&Ps are rewarded for durable free cash flow, balance sheet strength, and meaningful high-quality inventory depth. What they are not rewarded for is headline production growth. Now, there are a few realities shaping our industry right now. Core Permian inventory is becoming increasingly strategic. Tier one shale inventory is finite. Future wells will naturally move down the quality curve as inventory tightens, and preserving and expanding high-quality inventory is what drives long-term value. Now, with that in mind, our guiding principle is straightforward. Return on capital employed matters more than production growth. Disciplined development today allows us to protect and preserve our tier one inventory for a future time when our financial capacity and a strong, sustained commodity environment align. What are we doing to support this strategy? Our disciplined approach centers on several key priorities. First, we are protecting liquidity and reinforcing our financial cushion by eliminating the dividend and expanding our hedge position. Second, we are moderating drilling activity so the business remains cash flow neutral, even if oil prices move down into the mid- to high $50s, while still positioning us to accelerate debt reduction if prices remain stronger. Third, we are investing in optimizing across our base production, generating incremental volumes and cash flow without the capital intensity that comes with drilling new wells. Finally, we've continued to delineate additional high return inventory across our acreage, expanding the long-term opportunity set for the company. Taken together, these actions position HighPeak Energy to increase free cash flow, reduce leverage, and potentially lower our cost of capital in the future, preserve premium inventory for periods of sustained stronger commodity prices, expand our strategic optionality, whether through drilling, production optimization, or potential accretive M&A, increase long-term NAV realization for shareholders, and ultimately, implementing these key priorities will strengthen the value of our equity. Let me take a moment to talk about our capital allocation philosophy, because it's the backbone of long-term shareholder value. Our approach, again, is straightforward and disciplined. We will protect the balance sheet. A strong financial position gives us the flexibility to navigate commodity cycles and act when appropriate and opportunities present themselves. We will prioritize high return investments. Every dollar we deploy must earn its place, whether it's drilling a new well, optimizing existing production, reducing debt, or pursuing strategic opportunities. We will preserve premium inventory. Tier one drilling locations are finite across the industry, and disciplined development today safeguards the long-term value of those assets. Finally, we will focus on generating sustainable free cash flow that strengthens the balance sheet, allows us to potentially lower our cost of capital in the future, and ultimately supports a higher long-term equity valuation. When you look at 2026 development plan through that lens, every decision from reducing activity levels, eliminating the dividend, expanding our hedging program, is designed to enhance the durability and long-term value of the business. Simply put, our goal isn't to grow the fastest. Growth should be the outcome of a well-executed, financially solid plan. This does not happen overnight. HighPeak Energy's goal is to build a resilient, valuable company that delivers for shareholders over the long haul. A key part of our capital efficiency strategy in 2026 is the continued optimization of our existing production base. These efforts include targeted well workovers, artificial lift enhancements, and other operational improvements designed to increase recoveries from wells already online. Projects like these typically generate strong returns on invested capital and allow us to unlock additional value from assets we already own. It's a practical, high return way to drive incremental volumes and cash flow without the capital intensity of new well drilling. Let me now provide a quick operational update across our core development areas. At Flat Top, our results in the North Borden area, see slide 6 of our presentation, continue to demonstrate strong performance in both the Lower Spraberry and Wolfcamp A. These wells are delivering outcomes comparable to what we see in our core Flat Top area, which reinforce the quality and consistency of this acreage. The northernmost row of wells in our North Borden area is the only part of the field that will require minimal incremental infrastructure, and we expect that work to take place in tranches beginning in late 2026 and into 2027. Now in the core of the Flat Top area, we will continue developing Lower Spraberry and Wolfcamp A locations using the infrastructure already in place, driving corporate efficiency higher. Now, the Northeast Flat Top area, highlighted by the small red box, also on slide 6 of our March investor deck, shows where six wells experienced anomalous water inflows. We completed remedial work on several of those wells and are seeing encouraging early results. Because of the presence of the water flows, our 2026 plan includes no new drilling in the Northeast Flat Top area. Instead, we are focused on maximizing value through the remediation and optimization of the existing producing wells. Importantly, the impact to our long-term inventory is minimal. Even if we chose not to drill any additional wells in this area, it would affect only 18 Wolfcamp A locations that we carry in inventory, as we do not carry any additional zones in inventory for this area. We're also seeing encouraging progress in delineating the Middle Spraberry across both HighPeak Energy and our offset operators. There are now 9 successful producers, and we expect that momentum to continue with roughly 6 additional delineation wells planned between HighPeak Energy and our offset operators in the first half of 2026. Our long-term objective for the Middle Spraberry is clear. Convert more than 200 Middle Spraberry locations at Flat Top into fully delineated sub-$50 breakeven inventory. At Signal Peak, we will continue developing our core area in the Wolfcamp A and Lower Spraberry, both of which continue to deliver strong, consistent results. See slide 7 of the presentation. Beyond those core zones, Signal Peak holds substantial upside. We've demonstrated Wolfcamp D performance across the field in 2 different landing zones with results that closely track one another. The resource is clearly present across the acreage, and it's not going anywhere. We haven't drilled a Wolfcamp D well in roughly 3 years. However, during that time, the industry has made meaningful strides in optimizing deeper wells. We will continue to evaluate the development of the Wolfcamp D to determine when the economics fully support those wells competing for capital. We also see additional long-term potential in the Middle Spraberry, Wolfcamp B, and Wolfcamp C formations, which add further depth and optionality to our inventory over time. Our drilling results and technical work continue to reinforce what we believe is one of the deepest premium inventories among mid-cap operators. Today, HighPeak Energy has more than 2,600 total drilling locations across the Stack, Spraberry, and Wolfcamp formations. At our current cadence of drilling, that includes more than 30 years of high return inventory in the Wolfcamp A, Lower Spraberry, and Middle Spraberry alone. Over 100 total rig years of inventory across the full Stack. This level of inventory depth meaningfully differentiates HighPeak Energy from most of our peers. One point that we believe the market continues to underappreciate is the growing scarcity of Tier one shale inventory across the Permian Basin. The industry has spent the last decade or so developing its best rock, and the reality is that premium locations are not infinite. As that inventory tightens across the basin, the strategic value of companies that still hold significant high return drilling inventory will only increase. Our responsibility is to develop those locations with discipline, maximizing the long-term value for our shareholders. When we think about the value of this company, several key components stand out. First, our existing production base. A highly visible, reliable source of cash flow that underpins the business today. At current valuation levels, HighPeak Energy is trading close to the PV-10 proved developed value. The real long-term value lies with the untapped inventory. That inventory includes approximately 200 proved undeveloped locations in our core zones. More than 400 additional premium Wolfcamp A and Lower Spraberry locations. Over 200 Middle Spraberry locations progressing toward the sub-$50 breakeven delineation, and further upside potential in the Wolfcamp B, C, and D zones. All of this is complemented by our continued focus on optimizing existing production, which enhances returns and strengthens the value of our asset base over time. In closing, our focus in 2026 is on returns and resilience, not headline growth. We will apply strict capital and operational discipline to protect the bottom line. We will prioritize free cash flow generation. Any incremental free cash flow will first be directed toward reducing leverage and strengthening the balance sheet, positioning us for a lower cost of capital over time. We will remain precise and selective in how we deploy capital, concentrating on high return inventory, base production optimization, and disciplined delineation of additional premium locations. At our current development pace, our premium inventory alone represents decades of high return drilling. Even before accounting for the additional upside, we continue to delineate across our acreage. As Tier One shale inventory becomes increasingly scarce across the industry, the strategic value of remaining core drilling locations will only continue to rise. Ultimately, we are building a company designed to generate strong returns across commodity cycles, improve long-term NAV realization, and strengthen our equity value, and it all starts with reinforcing our financial foundation. Before I close, I want to recognize our employees. The progress we've discussed today is a direct result of their hard work, grit, and professionalism. Day after day, they show up, tackle challenges, and keep this company moving forward. Their commitment, both in the field and in the office, is the backbone of everything we're building. Again, I'm deeply grateful for what they do. With my comments now complete, operator, please open the call up for questions. Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered and you wish to remove yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Kalei Akamine with Bank of America. Your line is open. Morning, Mike and team. Yeah, I just wanted to start off here, Mike, if you could add any more color on some of your cost reduction and production optimization efforts that you've implemented over the last six months. You bet, Kalei. Thank you for the question. You know, obviously, it's what we do every day. It's not like this was an initiative started, you know, a quarter ago. To kind of walk through some of the cost reductions that we've seen both on the capital side and on the expense side. We've done a lot of optimization on how we are drilling and completing these wells. Obviously, we get a little faster every day drilling, a little faster completions. We've also optimized the completion chemical program, the perforation schemes, how we are landing these wells, as well as kind of structural changes to how we complete these wells, like utilizing simul-frac today versus what we were doing in the first part of 2025. There's a lot on the capital side being worked. On the expense side, we're doing a lot of production-based production optimization. Think lowering pumps, changing the type of artificial lift that we utilize, utilizing some chemical production opportunities that we have. You hate to say restimulation, but being able to pump some things downhole that can increase production and our return from the wells as well as remove some of what they call skin damage that allows more of the fluid to flow into the well. We have a program ongoing doing that. Overall, we've had lower commodity prices over the last couple quarters, which, you know, again, not that we don't do this every day, but we constantly rebid, reevaluate, look structurally at what we're doing with our infrastructure, how we treat the wells chemically, and go out for bids very routinely. We're seeing some cost savings on that front, not just how we're drilling the wells, but just the unit pieces that go into it and staying on top of that and making sure we're getting the best price for HP. That's helpful color. Then for my second question, could you maybe help us think about the split of wells across your development area for 2026? What is the split for, you know, Lower Spraberry versus Wolfcamp A versus Middle Spraberry look like? Then also, the different development areas that you've helped highlight this quarter. You know, North Borden versus your core Flat Top versus your core Signal. If you could just give us any color there. You bet. The good news is, what we are drilling for the foreseeable future will look almost identical to what we've done for the last year and a half, right? It's about 70% of the capital will be spent in Flat Top, the northern block. Again, that happens to be about the acreage split between the blocks, between Flat Top and Signal Peak. 30%, give or take, of the capital in Signal Peak. Think 90%+ of that capital will be Wolfcamp A, Lower Spraberry co-development. The other 5%-8% of capital will be Middle Spraberry, and some of the Middle Spraberrys will be co-developed with A and Lower Spraberrys as well. It will be in the Middle Spraberry, not in just the A and Lower Spraberry. Now, the split between, you know, again, in the North Borden versus Flat Top core, almost 50/50 for the Flat Top area. That 70% will be almost 50/50 between North Borden and Flat Top Central, I guess you'd call it. One point to make, as I said in the prepared remarks, we will not drill any wells like we did in 2025 in that little red box that's on slide 6 of our presentation. There will be no drilling in that area in 2026. You're TILing a few more wells than you're drilling this year. Can we assume that the percentages you talked about on the drills is going to be some pretty similar to the TILs this year? Absolutely, because it was basically the same percentage of drills last year. Those DUCs go into 2026. You make a great point. We are completing, you know, call it 7, roughly 7 more wells than we're drilling this year. We brought into 2026 something close to 20+ wells, called, you know, operational DUCs. If you kind of math out where we'll be at the end of the year, we should carry out into 2027 roughly 14-15 DUCs. Again, setting us up very nicely in 2027 to be able to effectuate exactly the same plan that we have in 2026, again, for further strong reduction in absolute debt. That's helpful color. Thank you. Yes, sir. Thank you. One moment for our next question. Our next question comes from Jeff Robertson with the Water Tower Research. Your line is open. Thank you. Good morning. Mike, on slides 10 and 11, you show the production profile and CapEx and the capital intensity. Can you talk a little bit about where the company's corporate decline curve was at the beginning of 2026 and where you think it might be at the end of 2026 and how that plays into the notion of increasing capital efficiency over time and delivering the balance sheet in 2026 and 2027? You bet, Jeff, and thank you for that question. I may step back a couple years prior to that instead of starting just on, you know, 25 and 26, because it's really important. Again, building a company from absolute greenfield all through the drill bit and building up to close to 50,000 BOEs a day, we had to drill a lot of new wells with several rigs. If you go all the way back to kind of the exit of 2024, corporate decline rate was, call it, mid-40%. Again, a pretty steep because you have a lot of new wells. At the end of 2025, we were down to about 38% corporate decline because if you recall, we had slowed down at the, you know, kind of midpoint of 2024 and into 2025, we slowed way down, and then even midpoint of 2025, we went down to 1 rig. As you look forward into 2026, of course, you came into the year right at 38%. At our current cadence and what we assume we will continue to do for at least the foreseeable future, you can expect about 2% decline in corporate decline rate. The 38 we came into the year with, we should exit the year into 2027 at, you know, 36% or so. To your point, as your corporate decline goes down, the amount of CapEx needed for maintenance CapEx to hold your production flat also comes down by that kind of relation. Does your HighPeak Energy's amortization on the term loan start again in the third quarter. I think it's about $120 million a year. If you were to Let's just say 20 over the next four quarters, beginning late this year, $120 million a year is roughly $1 a share with, based on 125 million shares outstanding. Are you trying to position the company where you could accelerate the amortization of the term loan? Absolutely. Jeff, you know, the great thing is the amortization is a set rate, right? It's $30 million a quarter. The great thing about where we sit with the term loan is that we have the ability to pay down any amount on the term loan at par. To your point, we can take any additional free cash flow that we're generating with this capital efficient program in 2026 in the backdrop of commodity prices being higher today. You know, HighPeak Energy's literally me, right? We're geared very heavily to oil price. As you mentioned, where else could you find in the public world where you have such a high gearing to the debt level that we have? To your point, in this environment, we will be able to pay down debt at a much accelerated rate, and for every $125 million we pay down, as you absolutely said, correct, it should be roughly $1 per share. In today's price environment, that's close to 20% increase in market value. By doing exactly the same thing in the next year, you should have similar results, except you've paid down more debt, and there's kind of a snowball effect because we do have a high cost of capital, call it 10%+ interest. It would be reasonable to assume that later down the road, once we get the financial house in order by staying very disciplined, we will have opportunities to hopefully lower that cost of capital going into the future. Thanks. It's last to you on operations, Mike. Is there anything structurally with respect to, say, water handling or anything else in the field that you're working on in 2026 that might offset some of the production optimization spending that you've outlined? You know, the good thing is anything we do to optimize production increases the revenue that we have in, lowers all of the per BOE metrics that we have. Now on the water system, the great thing is the water system's there, it's paid for, it's been there for a while. We just utilize what we already have, which makes both on the capital side for recycled water, for simul-fracs, as well as disposal of any of the produced fluids, very, very efficient. When you look at the capital reduction or what we like to call the intensity of capital needed to produce a certain level of volumes of hydrocarbons continued to go down over the last couple years. If you go all the way back to 2023, HighPeak Energy spent $1 billion. 2025, it was, you know, call it $500 million. 2026, half that number. Now, I don't want anyone to think 2027 is gonna be half of 2026. It'll be slightly lower because we do have some infrastructure that we have planned and in the budget in 2026 that's not going to happen in 2027. So think $15-$20 million cheaper total CapEx in 2027 to effectuate the exact plan that we have for 2026. So the company will continue to get more efficient. As you laid out earlier with the corporate decline dropping each year, that also helps accelerate that corporate efficiency. Thank you. Yes, sir. Thank you. Once again, ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. Actually, one moment. We have a follow question from Jeff Robertson with Water Tower Research. Perfect. Ryan, one question that came up on the November conference call was the distribution of shares by the HighPeak Energy and entities. Is there any update you can provide on the planned distributions in 2026 and 2027? Yeah. Good morning, Jeff. Good question. When we rolled into the 2026 calendar year and oil prices were kinda in the mid- to upper-$50s at the time, we got with the majority investors in the partnership and ended up extending for an additional year, which will allow us to, you know, get into hopefully a healthier market environment for fund distribution timing. We do have the flexibility to do it throughout the calendar year, or we could kind of go all the way through 2026 and start the distribution in early 2027. Okay. Thank you. You bet. Again, ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. I'm not showing any further questions at this time, so as such, this does conclude today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day.