Good afternoon. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Riley Permian public announcement of an acquisition. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, please press star one again. Thank you. Bobby Riley, Chairman and CEO, you may begin. Thank you, everyone, for joining the call. We're excited to discuss the acquisition that we announced this morning and how we think it's gonna enhance our operations and our opportunities. I'm not gonna spend a lot of time on talking about anything that you've already read about, but we got our team here for Q&A. And like I say, we plan to close this within the first couple of days of the second quarter. We're finalizing our due diligence and getting ready to move on with it. We're very excited about it. We think it enhances our drilling inventory, which is a big factor that we were looking at, and adds to most all of our metrics across the board. With that, let's get into it, and if you guys have any questions that we can discuss. As a reminder, please press star one if you'd like to ask any question. The first question is from John White with Roth Capital. Your line is open. Hey, good afternoon. Congratulations on the transaction, guys. Thank you, John. You guys have been real patient, on pulling the trigger, and it looks like, you waited for a real good one here. On the $200 million of notes, has the coupon been agreed to? Yes, that'll be 10.5%. Okay. Are there some offset operators that you could tell us about? Yeah, I think it's a mix of groups. It's a lot of private guys out there. A larger one is Spur. It's a private equity backed one. You've got a family backed one that's larger. You've got some of the legacy kinda big majors that have got some positions out there that don't show up in their public filings. It's the, you know, big guys that you might be familiar with. I think those are the primary unless anybody else has something to add. Okay. With the January 1 effective date, we can anticipate the $330 million will be adjusted downward somewhat at closing? That's exactly right, John. You'll take the first quarter's cash flow and use that to reduce the purchase price. When we give final results for the year and also guidance that we'll be giving you in about a week when we report earnings, that's gonna be for three of the four quarters for the year. I think you're gonna get about 98% contribution here in the second quarter from the target. You know, starting then you'll be getting it. Yeah, that's what you'll have to look forward to. A pretty, you know, nice purchase price reduction there from the purchase price. Okay. I appreciate that detail, and I'll pass it back to the operator. Thank you. Again, as a reminder, please press star one if you'd like to ask a question. The next question is from Jeff Robertson with Water Tower Research. Your line is open. Good afternoon. I got on a minute or so late, so I'm sorry if you've already covered this. Can you talk about the production profile on the acquired assets in terms of the natural decline that they have in 2023? Hey, Jeff. Thanks for joining. Yeah, I think this is a mix, so this asset's a mix of some newer wells and some older. The production's been coming up, looking forward, I think it's probably about a 30% decline, so it's not a steep shale decline. It's not the super mature decline that you might see from the larger, I guess, stack of wells. We consider this an underdeveloped asset, that's really the right type of asset we're looking for, where you're not paying for a whole lot of PDP, but rather have a lot of this undeveloped inventory. It's got that nice kinda 4,000 barrel a day level of production. Several... A good portion of that was kinda 2022 production that was coming on. I think 30% is probably a fair base decline for that. Will your capital program in 2023 be designed to keep it flat or grow on the acquired assets? Yeah. Will you update all that next week? Yes, is the answer to both, probably. We'll give you full guidance next week after we release earnings, but I can just tell you based on kinda the metrics that are embedded there in that press release, that's based on a maintenance program. I think we did that for, you know, a couple reasons. Some of it's just the practical aspect. In that we'll be taking this asset over, you know, ownership officially just in April there. As you know, it takes a little while to get it fully under belt and to be drilling wells and such that you only have it there for kind of the second half of the year. I think keeping it flat's a nice, a nice goal there. Then we see ability to do that pretty well. Can you talk a little bit about or I guess, on the senior unsecured notes that you're gonna issue? Yeah. We're thrilled to partner with these guys, EOC Partners, great guys that we've known for a while. These will take the form of senior unsecured notes. They've got a five-year maturity at a 10.5% coupon. They will have some maintenance covenants, ones that we're quite comfortable with. I'll tell you another feature they have that we really like is they've got scheduled amortization, which is a little bit different. Those typically have a bullet maturity. But the scheduled amortization is nice in that you're paying them down without the premium. That combined with just, I guess, about half of our debt will just be from our credit facility. We see just deleveraging with this kinda cash flow profile quarter-over-quarter sequentially. It's just a nice way to, you know, get that leverage back down. Will that be a quarterly amortization or a semiannual? Yeah, quarterly. Yeah. It's about 10% a year. Okay. One other question is, are there other working interests in the assets you're acquiring that might be available, or is this an area that you would hope to find other bolt-on type acquisitions? Again, I would say both to your questions. I'd say yes. There are opportunities to pick up additional interests as we go out and propose a well through various means, whether it be pooling, which we have the benefit of in New Mexico, or doing some sort of farm-out or lease agreement with other adjoining operators or leasehold owners. Additionally, as we talked about earlier in the call, there are a variety of other operators that are active, with some with big interests, some with large. We do think there is future opportunity for continued consolidation. Thanks, Kevin. The next question is from John White with Roth Capital. Your line is open. Yeah. Thanks for getting me back on. When you answered Jeff's question, I take it you're gonna drill some new wells on this asset in 2023. Yeah. That's right. Yes. We do plan to drill several. I think that'll be for the back half of the year, primarily. We'll see if we end up splitting that into 2 different programs. We'll drill some wells. We'll spend some capital. Why that EBITDA and free cash flow metric that we embed in there is a little bit different. We've got some implied CapEx spending. We would do that then to keep the production flat for the year, kind of at an exit rate. Thanks. About how long was the process to evaluate and negotiate? It was actually quite a bit. This was something that the market saw last summer. It was a markedly different asset at the time, in that the production was a little less than half of where it was now. We spent some of last summer looking at it. It went away for a bit, and then we've been re-engaged for the last couple months, as the profile has changed and, you know, some of the dynamics changed. It's an area that we've looked at for a long time. As Bobby said, we like this area. As we say in our press release, geologically, it's very consistent with what we've got now, on that Northwest Shelf geology in that geologic setting. Same type of well, so we're familiar with that, and that gives us confidence in execution for our engineering and subsurface teams on managing the asset. It's something that we've looked at, given our area's got a, you know, a defined set of players and an admittedly smaller set of players over in Yoakum County where we are currently. This is an area that's, you know, has had some recognition maybe for longer and may be better well-known by others. Thanks. I appreciate that context. I'll pass it back. The next question is from Stephen Dernick, a shareholder. Your line is open. Congratulations, guys. Bobby, it's nice to hear from you again. I got one quick question for you. You talked about these notes and the 5-year maturity, you know, you're gonna have a scheduled amortization. Also, Steve, you've reported there's a real positive impact on free cash flow and on earnings. Will any of this impact future dividends? Thanks for calling in, Steve. We're not making any scheduled plans of dividends. You know. The official statement is that to change the dividends, yeah. Dividends are always up to the board on how to declare those. But as you note, this is a positive benefit to our cash flow profile. We're not increasing any shares. So we certainly see the ability to have some excess cash flow. I think the near-term plan is to manage some of the debt and pay down some of the debt. Going forward, you know, we've got optionality for what we wanna do. Okay. Because before, you know, that was part of the attractiveness of the, was the stock because of the dividend yield. That's. Yeah. I mean, a strategy there. I wasn't asking. I just, you know, wasn't gonna have an adverse impact on that. We have no plans for any adverse impact. Okay. Okay. Congratulations again. Thank you. That was my only question. I'll yield back now. Again, please press star 1 if you'd like to ask a question. The next question is from David Dernick with Dernick Company. Your line is open. Good afternoon, guys. Right there, David. Congratulations on the acquisition. I had some questions as to the particulars of the properties. Can you speak towards, you know, what drilling looks like out there? What the depth is? What the cost per well? You know, what you're expecting in terms of ultimate reserves per well? Maybe some finding costs and operating costs, such things like that. Hold on. Kevin's gonna take that call. Okay. Just a second. Sorry, I was getting off mute. A lot of questions. Loaded question there. Depth-wise, this is about 3,500 to 4,000 feet TVD, drilling a 1 mile to 1.5 mile lateral. You're looking at wells total measured depth just under 10,000 feet. This is a little different than our Champions asset over in Yoakum County, in that it does require a more intensive frack, so cost per well are a little higher, somewhere in the $5 million-$6 million. We do anticipate the combination of this asset with our Champions asset to drive synergies that we can create some economies of scale and hopefully drive costs down across the company. Reserve-wise, I'd say this project falls very well in line with what we have currently. That's why we've been so slow to acquire something, 'cause we were looking at something that competed with what we already had. I think we have finally found something that will compete well for capital and be a very accretive asset as we go forward to be able to have predictable results. Okay. Could you... I'm assuming that we're talking about conventional reservoir here, not shale, more of a tight sandstone... Yes, you're correct. -type reservoir. You spoke towards having water handling facilities. Do you still have a significant amount of water associated with this production like you do at Champions? Yeah, there is. It's, it's very similar to Champions, I'd say, as far as production profile. As you alluded to, we have 70 miles of gathering line that's already in place, 6 disposal wells that are active, 1 that's coming online. The, we have available plenty capacity for the near-term future to handle our operations and planned activity. Okay, great. One, maybe just a little following up. Earlier on, you said we're talking towards a 30% decline. I'm assuming that you're saying an initial decline there, but that's just hyperbolic or flat number. I think that's the current decline. There's a combination of vertical and horizontal wells within this asset. All the horizontal wells, which there's currently 15 producing, are fairly new, 6 of which came on the last quarter of 2022, so you're just now kinda reaching the peak production of those. Like we said, we don't take over operations or acquire it and close till very near the first of April. At that time, we do anticipate trying to commence operations within the first 30-45 days to begin our first drilling campaign, which will put new additional barrels online, hopefully by early to mid-summer. Okay. One last question. In terms of reserves per well, are you similar to Champions, where you're looking at three-quarters of a million barrels to 1 million barrels per well or in that area or something different? I think it's very similar to Champions. We have three different benches within the target that we are developing. Some vary a little bit, but I think generally speaking, the reserves are in line with what you mentioned. Okay, very good. Thank you very much, guys. Congratulations. As a reminder, that's star one to ask a question. It appears that we have no further questions. That will conclude today's conference call. Thank you for participating. Everyone may now disconnect.