Good day, and welcome to the Magnolia Oil & Gas fourth quarter 2021 and full year earnings release and 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. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. 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 Brian Corales, Investor Relations. Please go ahead. Thank you, Sarah, and good morning, everyone. Welcome to Magnolia Oil & Gas' fourth quarter and full year 2021 earnings conference call. Participating on the call today are Steve Chazen, Magnolia's Chairman, President, and Chief Executive Officer, and Chris Stavros, Executive Vice President and Chief Financial Officer. As a reminder, today's conference call contains certain projections and other forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied in these statements. Additional information on risk factors that could cause results to differ is available in the company's annual report on Form 10-K filed with the SEC. A full safe harbor can be found in slide two of the conference call slide presentation with the supplemental data on our website. You can download Magnolia's fourth quarter and full year 2021 earnings press release, as well as the conference call slides from the investor section of the company's website at www.magnoliaoilgas.com. I will now turn the call over to Mr. Steve Chazen. Thank you, Brian. Good morning, and thank you for joining us today. I'll provide some comments on our results and accomplishments in 2021. I will then give an update about our plans for 2022 and how we anticipate allocating our significant free cash flow. Chris will then review our fourth quarter and full year results, provide some additional guidance before we take your questions. We ended a very strong year on a high note, both operationally and financially. Last year's achievements further solidified the strength of Magnolia's business model and strategy, while also marking some important milestones. Higher product prices and our team's continued focus on managing our costs expanded our pre-tax operating margin to 56%. We continued our capital discipline, spending just 28% of our EBITDAX on drilling and completing wells, which generated significant free cash flow and resulted in year-over-year production growth of 7%. During the year, we returned approximately 65% of our free cash to our shareholders in the form of significant share repurchases, as well as initiating our first dividend payment. We repurchased more than 25 million shares, reducing our diluted share count by 10%. At the same time, our cash position nearly doubled, leaving us with about zero net debt at year-end. Our greatest accomplishment last year was the execution of a full development program at Giddings. Giddings now represents more than half of our proved reserves and key financial metrics. Improved confidence in the continued strong well performance at Giddings supported the addition of a second drilling rig in the field in mid-2021. Having recently increased our lateral lengths to greater than 7,000 ft, now averaging four wells per pad, our program continues to experience additional operating efficiencies. We plan to continue to operate a two-rig program this year, which we expect to generate high single-digit% full-year production growth. Operating efficiencies are expected to continue into this year, helping to offset some of the oil field service cost inflation. Our goal is to continue to allocate a sizable portion of the free cash flow we generate towards enhancing the existing business and improving our per share metrics. This could include some small accretive bolt-on oil and gas property acquisitions with characteristics similar to our existing assets. As I mentioned, we returned approximately 65% of our free cash flow to investors during 2021, with the majority of this in the form of share repurchases, which reduced our fully diluted shares outstanding by 10%. Most of our share repurchases last year was stock purchased directly from EnerVest, our largest shareholder. As EnerVest sold throughout the year, we repurchased approximately one quarter to one-third of the amount they sold. Should EnerVest continue to sell shares this year, we would expect to repurchase a similar proportion. To adequately plan for this, we expect to keep a higher level of cash in our balance sheet to allow for these repurchases. Beyond this year, we would expect to see a shift in how we allocate our free cash flow, which will likely lead to a more normalized level of share repurchases of about 1% per quarter. During the third quarter of last year, we paid our first semiannual dividend installment of $0.08 per share, which we believe is safe and secure at $40 oil. Earlier this month, we announced our second semiannual dividend of $0.20 per share. This brings the combined dividend payments on our 2021 financial results recast at $55 oil and $2.75 gas to $0.28 per share. Our dividend philosophy is meant to appeal to long-term investors who seek dividend safety, dividend growth, and a dividend that is paid out of actual earnings generated by the business. We expect that each of the dividend payments to grow annually as we continue to execute our business plan, consisting of moderate production growth, the reduction of our outstanding shares. We ended 2021 with positive momentum that should benefit Magnolia into this year. We are very optimistic on the outlook for our 2022 operational plan, which includes development of both Giddings and Karnes, as well as some appraisal wells at Giddings. Improvement in drilling times at Giddings will result in more wells and more capital for the same number of rigs. As a result of our strong balance sheet, Magnolia fully captures current high product prices by remaining fully hedged. Fully unhedged, I should say. Our capital reinvestment this year will be well below our limit of 55% of EBITDAX at current product prices, providing high single-digit growth and generating significant amount of free cash. The combination of organic production growth and share reduction is supportive of growing dividend at Magnolia's double-digit return investment proposition. I'll now return the call over to Chris. Thanks, Steve, and good morning, everyone. As Steve mentioned, I plan to review some items from our fourth quarter and full year results and provide some guidance for first quarter and full year 2022 before turning it over to your questions. Starting with slide four in the presentation slides found on our website, which shows a summary of our fourth quarter. Magnolia delivered very strong fourth quarter 2021 financial and operating results and achieved several record levels. The company generated record total net income for the quarter of $192 million or $0.82 per diluted share. Our adjusted EBITDAX was $261 million in the fourth quarter, with total D&C capital of $772 million, lower than our earlier guidance, and just 28% of our EBITDAX. Magnolia's fully diluted share count declined by 5 million shares sequentially, averaging 231 million during the quarter. Total company production volumes grew 3% sequentially and 15% year-over-year to 69.4 thousand barrels of oil equivalent per day in the fourth quarter. Our financial performance, including adjusted EBITDAX, pre-tax operating margins, and earnings per share, continued to improve throughout 2021 as we benefited from rising product prices, growing production volumes, and lower fully diluted shares outstanding. We expect to continue to benefit from improved product prices this year as Magnolia remains completely unhedged on its oil and gas production. Looking at the quarterly cash flow waterfall chart on slide 5, we began the fourth quarter with $245 million of cash. Cash flow from operations before changes in working capital was $251 million during the period, with working capital changes and other small items benefiting cash by $8 million. Our D&C capital spending, including land acquisitions, was $74 million in the quarter. Cash allocated towards share repurchases in the fourth quarter was $55 million, and we ended the year with $367 million of cash on the balance sheet, or more than $1.50 per share. Slide six shows our cash flows during the full year of 2021. For that full year, we generated cash flow from operations of $779 million before changes in working capital. We incurred $236 million drilling and completing wells, including leasehold acquisitions, and we spent $339 million on share repurchases and paid $21 million in dividends. Summarizing our progress during the year, we grew our total production by 7% compared to 2020 levels, reduced our diluted share count by 25.3 million shares or 10%, and leading to production per share growth of 18% over the period. This growth was all organically driven without incurring any debt and while building $174 million of cash. Turning to slide seven and looking at our cash costs and operating income margins. Despite the substantial increase in product prices during 2021, we realized only a modest increase in our cost during the year. Comparing the fourth quarter 2021 to year-ago levels, our total cash operating costs increased by about $1.50 per BOE, yet our revenue per BOE rose by $25 a barrel. Our total adjusted cash operating costs, including G&A, were $11.32 per BOE in the fourth quarter of 2021. Including our DD&A rate of eight dollars and thirty-seven cents per BOE, which is generally in line with our F&D costs, our operating income margin for the quarter was $31.63 per BOE, or 61% of our total revenue. Management's philosophy is to maintain our low leverage and a strong balance sheet. We currently have approximately 0 net debt and expect to generate a significant amount of free cash flow through the year. Our $400 million of gross debt is reflected in our senior notes, which are callable later this year and do not mature until 2026. We have an undrawn $450 million revolving credit facility, and including our $367 million of cash, our total liquidity is more than $800 million. Our condensed balance sheet and liquidity as of year-end are shown on slides eight and nine. As Steve mentioned, we returned approximately 65% of our free cash flow to our shareholders during 2021. Although we initiated our first dividend payment during the year, most of the cash returned to shareholders was in the form of share repurchases. Looking at slide 10, this illustrates the progress of our share reduction since we began repurchasing shares in the third quarter of 2019. During those two and a half years, we have reduced our total diluted share count by 36.8 million shares, or approximately 14%. Most of our share repurchases last year were stock purchased directly from EnerVest, our largest shareholder. Earlier this month, EnerVest sold 6.9 million additional shares to the market. In a separate transaction, Magnolia repurchased another 2 million shares from EnerVest, or nearly a quarter of the total shares sold. We currently have 15.8 million shares remaining under our current repurchase authorization, which is specifically directed towards Class A shares repurchased in the open market. Class B shares purchased directly from EnerVest do not count against the share repurchase authorization. Turning to slide 11, we declared our first or final semiannual dividend for 2021 of $0.20 a share earlier this month. The dividend payment was based on our full year 2021 results, recast at mid-cycle pro-product prices of $55 oil and $2.75 natural gas. Inclusive of the interim dividend paid during the third quarter of last year, the total dividend associated with our 2021 results equated to $0.28 per share or yield of about 1.3%. We expect our dividend to grow at least 10% annually, which is in line with our expectation for mid-single digit annual production growth and the reduction of our outstanding shares by at least 1% per quarter. Looking at our year-end 2021 reserves and D&C costs on slide 12, Magnolia had a very successful organic drilling program during last year. Magnolia books only one year of proved undeveloped reserves, and as a result, 81% of our 2021 proved reserves were developed. The proved undeveloped reserves at year-end 2021 represent what we expect to convert to proved developed producing during 2022. Our drilling program added 31 million barrels of oil equivalent after adjusting for acquisitions and excluding price-related revisions. Last year's capital for drilling and completing wells totaled $232 million, resulting in a proved developed F&D cost of $7.48 per BOE, while replacing 198% of our 2021 production. The F&D level is similar to the overall DD&A rate for our asset base and indicative of the capital efficiencies and low development costs in our Giddings asset. Turning to guidance for 2022, we plan to continue to run 2 operated drilling rigs across our assets. One rig will be dedicated to drilling development wells in Giddings, with the second rig drilling a mix of development wells in both Karnes and Giddings, in addition to also drilling some appraisal wells at Giddings. We continue to improve our efficiencies in the Giddings field, which should help to offset some of the anticipated oil field cost inflation. Total D&C and facilities capital is estimated to be approximately $350 million for the year, which includes a higher than average amount of spending on facilities associated with our core development area in Giddings, which is expected to provide future operational and economic efficiencies. Our non-op capital is estimated to be approximately the same as the 2021 levels. We expect that this program and activity level to deliver full year production growth in the high single digits%, with production at Giddings increasing by approximately 20%. As I mentioned earlier, we remain completely unhedged for both our oil and gas production, allowing us to fully capture higher product prices. Oil price differentials are anticipated to be approximately a $3 per barrel discount to MEH and in line with recent quarters. We expect our 2022 current effective tax rate to be in the range of approximately 5%-8%, with an equivalent amount of cash taxes. Looking at the first quarter of 2022, we expect total production to be approximately 70,000-72,000 barrels of oil equivalent per day, and our D&C capital is estimated to be in the range of $85 million-$90 million. Our fully diluted share count for the first quarter should be approximately 228 million shares. We're now ready to take your questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Leo Mariani with KeyBanc. Please go ahead. Yeah. Good morning, guys. A couple questions here on Giddings. Wanted to get a little better sense of roughly how many Giddings wells you guys expect to drill in 2022. Kinda roughly how many of those are appraisal wells. Perhaps you could give us a little bit more color about what you think you might accomplish with the appraisal program here in 2022 at Giddings. Sure. Maybe a little overview on Giddings quickly. At this point, we have two areas that we have whatever the term of art is, de-risked. Where we sort of know what'll happen when we drill the wells. One is the traditional core area, and one is a little smaller than that, but not a lot smaller, and a little gassier. It may add another month to the payback period on the wells. Instead of 4 or 5 months, it'll be 5 or 6 months of payback. There's a fair number of wells in that area. We've got another 4 or 5 areas which model well, that are similar in size to these. We'll spend this year looking at those and seeing how many of those we can bring to fruition. The other area, another driver, which I don't think we can underestimate, we're doing some experimental work to see how what the space is, what the appropriate spacing is. We space very widely currently, so there's no need to space tightly. But we've done some work, and the wells have only been on production for a few months, so we can't really tell. Because the goal is to make sure that when you drill a daughter well or whatever The term of art is that well actually generates more reserves for you, not just a faster production. We'll watch the curves of those pretty well, but so far it's encouraging. Obviously, you know, this has generated a large number of additional locations. I think this year they'll be looking at spacing. We're looking at lateral lengths. We've extended from 4,000 to 7,000 ft, and we'll probably try longer ones than that. We already are trying longer ones, seeing what kind of economics we can have. We've got a number of areas that look promising that we'll be at least beginning the testing out phase. That testing out phase is gonna last a couple years. To the extent we have more leases we could acquire there, we'll tell you absolutely nothing about it. But it. Where we're leased up, I think we'll be slightly more forthcoming than in the past. We've got a very long running room in Giddings. This location stuff is sort of a game of liar's poker, so I, you know, don't really wanna get into a location thing. You know, a lot of locations, and so, as a large long-term shareholder, I feel confident that, my heirs will still be cashing Giddings checks. Okay. Very, very helpful overview for sure. Maybe just, you know, switching gears a little bit here. I just wanted to kinda clarify. I know y'all have a plan to repurchase, you know, roughly 1%, per quarter. I know it can be more than that as well. When y'all look at that, do you basically tell yourselves that, "Hey, you know, that 1% is what we'll just call kinda regular way through the market repurchases." Do you kinda view the purchases from EnerVest to kinda be on top of that, sort of a supplement to kinda this regular way, 1%? Is that sort of the right way to think about it? I think that's a good way to think about it. You know, if you look at. Remember, I always talk about comparing this to an industrial company as opposed to an oil company. What do industrial companies have? They have good balance sheets. They have regular growth. You know, there are cycles in every business, but generally regular growth. They repurchase some shares every year. They basically reduce their share count a little every year, and they pay growing dividends and predictably growing dividends. That's the model. It's not really to see how much money we can distribute this year or any particular year. If you look at the 1%, I would. I view that as something we can do, you know, at this sort of pace of buying down shares, we'll be down close to 200 million shares, you know, in a while. You know, it's buying 2 million shares a quarter, which we can do in the open market once there's more shares distributed. We won't have to rely on EnerVest. You know, I view EnerVest as truly, you know, proving the value per share of the company. As we buy in their shares, I believe, perhaps wrongly, by the way, but I do believe firmly that I'm buying shares at a discount to what this business ought to be able to generate over time. As I look at Giddings, and I look at Karnes, and I look at other nearby opportunities, I think we got in our net debt, so-called net debt position. I don't know what to call it that. But you just say, you know, as a small private business, I just as soon own this. I don't really know what the big companies are doing. So I look at this as would I like to own this stock for a long period of time? The buying in the shares at 1% is part of the long-term plan. The EnerVest thing I've always viewed as an opportunity, because you don't usually have an opportunity, is what they do is they go out and sell the shares to the market. Let's say they wanna sell 7 million shares. The price they get is the clearing price for the 7 million shares, and I buy 2 or 3 million shares on top of that, so I'm getting a fair price. We're not just negotiating with them to get a price. We're actually market testing the price. We're getting a little discount off of what we could do negotiated, and I think that's fair for the shareholders. We're also careful. I'm also careful about not overpaying for the stock. If you know if the stock got overpriced by some measure, I think you know we'd probably slow up the process, 'cause the market's so volatile, you'll always have a chance. Okay. No, that's very helpful. Maybe just last quick one for you guys. I know you have the 2022 production guidance out there, kinda high single-digit growth, certainly looks good. Just any rough indication of what you think the oil cut will come out at to be here in 2022? Yeah. I would say similar to what we saw in 2021. We can't tell exactly because if we shift a couple of wells to some of these how far away Giddings locations, we actually don't know. We got a model that predicts it, but I wouldn't bet my life on the model. There's some variance. Also, if we drill some Karnes wells, they're oilier. That's right. You know, we can sort of manage this to whatever we want, really, and without really changing anything. We'll follow the economics here rather than trying to manage the number to exactly some number. As we just talked about, you know, we're basically buyers of shares, not the sellers. Okay. Thank you, guys. Our next question comes from Neal Dingmann with Truist. Please go ahead. Steve, I thought I'd ask a shareholder return question a little bit different. I know you've always said your wife appreciates the dividend, so I'm just wondering, can we assume you'll be focusing on a bit more dividend in the near term? Yeah. I mean, we like dividends at our house. I think we're pretty well aligned. You know, you don't really need to guess. You know, I've got a 25-year, 22-year history of dividends that one could look at. Unless there's been brain surgery between then and now, Chris will stop me if there's brain surgery, so drag me out. You know, unless there's been some brain surgery, you know, this returning money to shareholders is not a new concept for me. You know, Oxy grew its dividends essentially every year. You know, we grew the dividends every year for a very long period of time. You know, it's part of the culture of the business and part of what attracts people to business. We're smaller, so you know, growth is also important for a small company. The point of the growth is to generate more cash to pay more dividends. I mean, the whole point of share repurchase is to generate fewer shares, so each shareholder will get more dividends. You know, somebody said, "Well, I might want it right away," and somebody else will say, "It's okay to be deferred." You know, we pick deferred. I mean, there's plenty of choices to pick people who want to pay it right away, and we just assume pick deferred because, you know, as the inevitable cycles occur, you will still be there growing the dividend. Yeah. Well said. Then my second just on D&C. Just amazing, y'all continue to spend, I think you said 20% EBITDA on the D&C with the solid growth. I'm just wondering is that repeatable given what you're seeing out of Giddings? Maybe just address that a bit. Thank you. Yeah. Well, you know, luckily, you don't see the forecasts that are given to us by our D&C team. The answer is, I doubt it, you know, 'cause we had a lot of improvement without much cost change this past year. You know, I don't think we can repeat that. We've caught off. Yeah, a lot of efficiencies. A lot of efficiencies. I think that. Yeah. I don't think so. But it's gonna be nowhere near 55% either. Yeah, you know, the problem with now talking about percentages is that, you know, all this money that's piling up in people's cash boxes is all on spreadsheets. You know, at the end of the year, you're gonna have so much in your bank account, and I just as soon wait for the money to get there. I don't really know what the percentage is gonna be, but it's certainly not gonna be anywhere near 55%. The other point I would make is, you know, with only two rigs running, to add another rig is a 50% increase in capital, roughly. We're not up for that either. You know, I think that's pretty straightforward. Yeah. Very straightforward. Thank you. Thanks. Our next question comes from Zach Parham with JP Morgan. Please go ahead. Hey, guys. Thanks for taking my question. I guess first off on cash return, you've obviously built up a pretty sizable cash balance. You've been buying back stock, but that's slowed a bit, you know, somewhat out of your control, just given when and how much EnerVest decides to sell. You know, at current commodity prices, you're gonna generate a lot of free cash flow this year. You know, if that cash balance continues to build, you know, could you consider a variable or special dividend? I don't think we go to a variable or a formula-based dividend. We have a formula, but we're not gonna tell you what it is. But generally speaking, you know, in a normal environment, whenever that is, next time we get to that, if we ever do again, you know, we would spend around half the money on small bolt-ons, on acquisitions, half the free cash flow, around a quarter on dividends and around a quarter, you know, on share repurchases, the 1%. But, you know, there's no year like that, right? That's what the cash is for, to allow us to. If the opportunity came to buy something that was near, and I don't see much of that, by the way, you know, we could do that. We're not gonna allow the cash to just build up. You know, there's no point to that. Could we put a, I'll call it a special dividend rather than a formula-based dividend. You know, if it continues to build up and we get a clear line of sight on what EnerVest is going to do, and I think by the end of this year, we'll have, you know, a clear line of sight. I think, you know, a single special dividend to sort of pay off some of the cash wouldn't be unreasonable. Again, at my house, this will always be welcome. Got it. Thanks. That makes a lot of sense. I guess just one on the model on operating costs, both LOE and GP&T ticked a bit higher during 4Q. Can you just talk about what drove that and your outlook for operating costs into 2022? I'll just say on LOE. LOE on a quarterly basis for a small company, even a large one, by the way, is volatile because, you know, workovers go in and out of that. Your workover activity is expensed, so it becomes part of LOE. Then, you know, the next quarter, you don't do so many workovers. It looks like you did a better job, and really nothing happened. You see it all the time, even the largest companies. You see those changes, and it's almost all of them sort of relate to workovers. They tend to do workovers in the fourth quarter. This has been true for a quarter century. I've been watching guys do workovers in the fourth quarter for some reason. I guess they, you know, they figure nobody cares about their operating costs or something. That's what you're really looking at in the LOE. I think Chris can answer that question. On the GP&T, I think it's really related to the gas and NGL prices being higher. I think it's sort of just some of them are a percentage of the contract. Of what you get in the contract. It costs, you know, when NGLs are $35 a barrel. You're gonna pay more. You certainly saw that in the fourth quarter. It works sort of like severance tax for really for part of it. Got it. That makes sense. Thanks, guys. Our next question comes from Umang Choudhary with Goldman Sachs. Please go ahead. Thank you. Good morning, and thank you for taking my questions. My first question was around efficiency improvement in Giddings, which you mentioned is offsetting some inflationary pressures. Can you help us disaggregate the two? What is the secular efficiency improvement, and what are you seeing from a service landscape right now? One more, if I can tack on, like, how long do you think you can drill on lateral lengths in Giddings area? What was that last question, Umang? How long can you drill on lateral lengths in Giddings area? Oh, how long? Yeah. Well, we know how much we physically can do right now. You know, we're up around 10,000 ft. The question simply is it worth doing? By adding the additional footage, are we gaining something because it costs more to drill longer? Right. That's really the question. You know, we could do maybe more than 10,000 ft because we have good understanding of the reservoir at this point. It's more an economic question than a physical one. We don't know the answer yet. There may be a different answer in different parts of it also. As far as the service costs, you know, some of it, you know, I think is like steel and stuff is pretty temporary. You know, steel guys, you know, they're like other service providers. They'll build capacity, and eventually there'll be plenty of steel. Probably not till late next year, I don't think, but eventually that'll fix itself. Some of that sort of already come off. We don't have any purchasing issues this year. We're set for this year's program. Right. On labor costs, which is truck drivers and that kind of stuff, you know, we've been through a downturn in the oil business from you know, last couple of years. A lot of people who used to work in the business were driven out. They've gone to work somewhere else, Walmart, Amazon, whatever. You know, to bring them back is you know, challenging. You know, it's an aging. Especially in the field, I'm talking about. It's true for service companies as well as our operations. People tend to be a little older on the average, a little closer to retirement. Years ago, their kids used to take the jobs because they were good jobs and now, you know, maybe there's less of that. You know, I think the answer is there's a fairly sizable labor component that's gonna increase. It'll affect our G&A a little bit also. You know, some of our people, IT people, accounting people, who could work at, you know, Amazon or something, and our oil people are all gonna get good size raises this year. You know, they've been through a tough time. I'm not really bothered by all this. That's the way it is when you have a cyclical business. Cyclical business always have to pay more. Sometimes you forget that. It added about $1.50 a barrel equivalent this past. All in, yeah. All in. You know, which is a, you know. You're talking about when you're through probably a couple of dollars total, you know, as it rolls through. It's $2 a BOE. I think the oil price went up more than $2. You know, like I told you this before, it's not like Johnson & Johnson where, you know, they gotta find somebody to pay more for the Band-Aids. We're already getting the money and giving a little bit to the workers doesn't strike me as either unfair or unwarranted. Makes sense. My next question is on non-op activity in Karnes. Any latest update there? You know, they don't tell us. You know, you sort of get the bill and you pay it. You don't really know because you know a lot of these companies have big positions, not just in Karnes, but maybe in the Permian, and they're leasing positions and that sort of thing is very different. Karnes, it's all held by production, and so they can drill a well today or you can put the thing off for two years without losing anything. That's probably not true in some of the leases somebody might have in West Texas, where you have a lot of competitive pressure. I, you know, would guess there'd be modest activity from those people who need to switch to continue to have a lot of activity in the Permian. A decent Karnes well has no trouble competing with a Permian well on pure economics. I do think that there's other issues in the Permian with leases and that sort of thing, and competing people. It's forcing people to stand out on penalty if they don't go along with the wells. You see a lot of that in the Permian. You don't see that much of it in Karnes. All I would say is that, you know, I don't think there's gonna be a lot of activity. You know, I could be wrong and, you know, we've got some extra cash somewhere to cover it if it turns out. Got it. That's helpful. Thank you. Thanks. Our next question comes from Noel Parks with Tuohy Brothers. Please go ahead. Hi. Good morning. Morning. I sort of wanted to talk about a few macro topics as you just sort of look at what's happened just in, you know, the last three months or so when I think in November, we had maybe just touched $80 for the first time and managed to hang in there. Then, of course, you know, now we've seen $90. So we've got some pretty clear motion in oil, but also NGLs. I think your realized prices were about $35 a barrel, and I can't remember the last time we saw NGL prices like that. Just wondering, could you talk about your thoughts on the NGL outlook? You know, how you feel about visibility there? Well, you know, NGL is mostly about gas. Uh-huh. Yeah, it's 80% of the value is sort of gas and 20% is, you know, call it sort of oil. You know, the pricing is really, you know, driven by gas prices and some by oil prices. The demand is very strong for the feedstocks. I don't see weakness in it per se, but it does float with the gas price effectively. Gas prices are, you know, were, I don't know, $5 and change before. Now they're $4 and change, and could be some other number tomorrow. Sure. These people in the east forget that March and April follow February. Uh-huh. And so. Right. They have. There are- They have forgotten it for decades. My God, it's cold February 15. Right. Anyway, you know, March and April come, and it somehow gets warmer every year. I, you know, it's a cyclical commodity and it's heavily influenced by gas. I think the fundamental demand into the market is, you know, very strong, petrochemicals, and that whole sector is y ou know, on fire really. Right. Great. You know, another thing I wanted to ask you about is I know we've talked in the past about, as far as the U.S.'s ability to expand production that, you know, there are some pretty serious constraints, physical constraints on raising production, you know, just, you know, the lead time it takes, you know, from standing up a rig to actually, you know, getting your cash back. I just wonder, given what's happened with the cost environment last few months, just what are your thoughts on just sort of the macro thoughts on U.S. supply and, you know, what it really can do over the next year or two? Well, not much this year. You know, I think the supply, the constraints on steel and labor and stuff will stop people from large scale increases. All are happy. You know, as we go into next year, you know, most of the people that run, you know, E&Ps are drillers at heart. They can hardly wait to drill more wells. They see the margins at $80 oil. You know, it's pretty enticing. Remember, this so-called free cash flow number they talk about is simply the EBITDAX less what they choose to spend drilling. Right. Not some, you know, God-given number, just what they choose to spend. You know, I think over time, you know, they'll choose to spend more because they'll see the margins that are available to them and how it's accretive to whatever. Probably not so much this year. I don't think they can really do much this year. Some of the private people might, but the public ones, I think, really can't. Maybe next year may even take another, you know, other year beyond that. You know, you should be cautious about U.S. production for the next, you know, 18 months, I think. Right. Great. Just the last one for me. Any updated thoughts on what you're seeing in the A&D market in the Eagle Ford for non-operated interests? I know you've said in the past that might be kind of a sweet spot for you in the acquisition market. Well, if the non-operated interests were owned by people with IQs over about 100, that would be good. What you're saying would be true. They seem to think they should get the same price as an operated interest. Mm-hmm. Right. Uh- Right. You know, that's an interesting story. Generally speaking, we're not really in the market for PDPs. We can generate PDPs really cheaply as a company. A lot cheaper than buying PDPs from some third party. If there were a fair number of undeveloped or locations or whatever you wanna call it, you know, in the Karnes area where you had a real good grasp of it, you know, that'd be a different story. You know, it would cost us two or three times our DD&A rate to buy a PDP in Karnes when I could spend, you know, basically a DD&A rate or less, you know, in Giddings, you know. Why am I here? Just to make some private equity guy rich? I mean, I really think that that's not something we're much interested in. You know, if we can get locations, we get some upside with it, you know, I think we could talk about that. Absent a significant amount of upside, you know, the perfect acquisition was the original Giddings acquisition, where we paid for the production. There was a lot of optionality or upside to it. As we look at acquisitions of, you know, anything other than a few million dollars where we're just buying fill-in locations, as we just look at acquisitions, we're looking more for what can we do to make it better. It's really not cost reduction. It's really, you know, locations that somebody didn't understand that they had. Cause other than that, we don't need to do anything in that area. We can't find that, we'll just do nothing. We're not pressed. We don't worry. We don't have to worry about growth, and we don't have to worry about maintaining our margins. Right. You know, it's interesting you said describing it as locations where somebody doesn't understand what they had. My first thought is, well, the Eagle Ford has been around long enough that there can't be many people like that. On the other hand, when I think of how much energy comparatively has gone into the Permian over the last, you know, five years, I guess it dawns on me. Well, I guess there could be locations or acreage held by production in someone's hands that just hasn't received a lot of study. My question is that anywhere near your neck of the woods? Would there be opportunities like that? There's clearly some. You know. Oh. It's held that way for a reason, which it has to do nothing with the physical aspect, with who owns it and whatever they think about that. So, you know, again, the perfectly rational party, you know what they would do, but there's no seller I ever met that was perfectly rational. Fair enough. Thanks a lot. Thanks. Our next question comes from Nicholas Pope with Seaport Research. Please go ahead. Morning, guys. Morning. Kinda following on that M&A question. I was kinda curious. You did have an acquisition during the quarter. What was the $7.5 million acquisition listed on the cash flow statement? It was a small. A small land acquisition. We're gonna drill some wells there. We knew the wells were gonna be drilled, and you know, it was a price that made sense for us to buy the acreage to. Then I think the wells are being drilled. Gotcha. Is that in Karnes County? Or is it Giddings related? No, it was Karnes. It was a Karnes-related acquisition. Got it. That's. I appreciate that. The comment on the repurchase of the Class B shares from EnerVest, I kinda wanted to clarify there, from the prepared remarks. The comment I think was that Chris made that was that the share repurchase from EnerVest were not part of the re- That's right. the agreement. Is there any limit on that, or is it just as that comes available, you guys have flexibility to make purchases at- Because we're dealing with an insider, which is one of our directors who is the head of or the nominal named party in EnerVest. The board, excluding that person, approves each acquisition separately because it's an insider trade, essentially. That's really the. There's no real limit to that. You know, understand that they're not exactly shares. It has two parts. One is the partnership interest, which is what you care about, which is an interest in the whole business. The second is a voting right, which is the share, but it has no economics with it. When you buy it, you're buying a partner, you know, a piece of the company directly, and that's extinguished when we buy it. You know, the. If we buy 1% of the B-shares, that 1% ownership is spread over all the owners, directly. It's a little different than buying the stock exactly. The reason why it doesn't count is because the board hasn't approved any B-shares because they're done when it shows up and to ensure that the well, it's an arm's length discussion with EnerVest. Got it. That makes sense. And on the operations side, there was another comment in the release that, you know, activity was skewed to Karnes during 4Q versus Giddings. What was that split? Like, what was brought online in the quarter? 'Cause I was a little off on my production model in there. It was mostly Karnes activity that we brought online. Oh, it was mostly Karnes. When you're only running one completion crew, you know, this quarter-to-quarter variation doesn't have any intrinsic meaning. Yeah. The timing of you know when these things get turned online can skew things. Skew things, and you try to make more of it than is warranted. Got it. That's all I needed. I appreciate the time, guys. Thank you. This concludes our question and answer session as well as our call for today. 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