Good morning. My name is Brandi and I will be a conference operator today. At this time, I’d like to welcome everyone to the Midstates Petroleum Third Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] Thank you. I would now like to turn the call over to Mr. Al Petrie, Midstates’ Investor Relations Coordinator. Please go ahead, sir.

Thank you, Brandi. Good morning, everyone, and welcome to Midstates Petroleum’s third quarter 2015 earnings conference call. Joining me today as speakers on our call are Jake Brace, President and CEO; Mark Eck, Executive Vice President and COO; and Nelson Haight, our Executive Vice President and CFO. Jake will begin today’s call with an overview of the quarter and brief operational and financial highlights. Mark will follow with additional details on operations, then Nelson will review the financial details for the third quarter and provide guidance for the fourth quarter. After Nelson, Jake will make some follow-up comments, and then we will take your questions. Before we begin, let’s get the administrative details out of the way with our Safe Harbor statement. This conference call may contain forward-looking information and statements regarding Midstates. Any statements included in this conference call or in our press release that address activities, events or developments that Midstates expects, believes, plans, projects, estimates or anticipates, will or may occur in the future are forward-looking statements. These include statements regarding reserve and production estimates, oil and natural gas prices, the impact of derivative positions, production expense estimates, cash flow estimates, future financial performance, planned capital expenditures, future potential drilling locations, resource potential, and other matters that are discussed in Midstates’ filings with the Securities and Exchange Commission. These statements are based on current expectation and projections about future events and involve known and unknown risks, uncertainties and other factors that may cause actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. Please refer to Midstates’ filings with the SEC in the third quarter Form 10-Q that will be filed shortly for a discussion of these risks. Also please note that any non-GAAP financial measures discussed in this call are defined and reconciled to the most directly comparable GAAP measure in the tables in yesterday’s earnings release. I will now turn the call over to Jake for his comments.

Thanks, Al. Good morning, everyone. Thank you for joining us today and thank you for your interest in Midstates. The third quarter was another solid quarter for us and let me review a few of the key highlights. As has been our focus since early 2014, we generated adjusted EBITDA in excess of operational CapEx of $25 million during the quarter, bringing our total to $62 million of adjusted EBITDA in excess of operational CapEx for the first nine months of 2015. We expect this trend to continue for the remainder of the year and we are currently on track to meet our guidance of adjusted EBITDA exceeding CapEx by $75 million to $100 million in 2015. Additionally, our capital cost management initiative has been very successful thus far in 2015. At the beginning of the year, we established a multi-disciplined team to tackle our DC&F cost structure and set a goal to reduce well costs from $4 million where it stood at the end of 2014 to $3.3 million by the end of 2015. We met that goal as we talked to you about back in July, six months early, and now have exceeded that target and are currently AFE-ing wells for $3.1 million. At this new well cost and even at the current strip pricing, our Miss Lime wells are generating IRRs greater than 35%. Production for the third quarter came in at approximately 32,600 BOE per day, after a roughly 650 BOE per day impact from a temporary production interruption on one particular pad in the Miss Lime. Our new wells in the Miss continue to perform as expected and we have also been successful in optimizing our base production to help mitigate production declines during 2015 with reduced drilling activity. As a result of our strong…

Thanks, Jake, and good morning to everyone. I will start by discussing our capital cost management initiative, then review our third quarter well performance, provide an update on our down spacing wells and wrap up with our operational plans for the remainder of the year. As Jake mentioned earlier, we are very pleased to have exceeded our year-end well cost target in the Miss Lime and are currently AFE-ing wells for $3.1 million. Our operations teams have worked diligently with our suppliers and service providers during this challenging commodity price environment and have been able to reduce our service costs significantly. Additionally, our drilling completions and asset teams all have done a great job driving operating efficiency improvements and reducing cycle times. We have reduced drilling cycle times over 20% from 22 days in 2014 to 17 days currently. With this original additional leg down in well costs, over 60% of our total well cost savings continue to be through efficiency gains and process refinement, which should largely remain in place as service prices eventually rise with commodity price improvement. We are proud of what we have accomplished on the well cost front year-to-date and we will continue to strive to push our costs lower. With that being said, we don’t anticipate our costs getting too much lower than they are now. Our premier Mississippian Lime asset continues to perform well. We continue to produce best in class peak 30-day IPs of roughly 560 BOE per day and our 2015 well performance continues to track well with our year-end 2014 third-party PUD type curve that was increased 25% last year. At October 12 strip pricing, as Jake mentioned, our PUD type curve is generating IRRs greater than 35% with our current AFE of $3.1 million. Through our normal Miss Lime…

Thanks, Mark. We were very pleased with our third quarter results. We generated $80 million in adjusted EBITDA, which was at the lower end of our guidance range, even though our production was below our guidance range because of the temporary Miss Lime interruption that Jake mentioned earlier and oil prices that were down about 18% compared to the second quarter of this year. Our operating capital expenditures totaled $55 million and we were at the low end of capital guidance as we continued to benefit from improvements in drilling efficiencies and lower service costs. About $53 million was spent in the Miss Lime and the balance is in the Anadarko Basin. All of our line item costs came in within or below the guidance ranges we provided. Net-net, we generated adjusted EBITDA that outpaced operating CapEx by $25 million, and we are well on track to meet our target of generating $75 million to $100 million for full-year adjusted EBITDA beyond our 2015 operating CapEx figures. For the fourth quarter, we expect our operational CapEx to be approximately $50 million to $60 million with 95% of it invested in the Mississippian Lime and the balance in the Anadarko Basin. These estimates reflect the plan that Mark just described with three rigs working on the Miss Lime. We expect our adjusted EBITDA in the fourth quarter to be in the range of $70 million to $80 million, which will well exceed our expected operational capital. Additional detail is available in our supplemental information package posted to our website this morning. On August 3, 2015, we completed a one-for-10 reverse common stock split. The financial statements included in our earnings release, along with my comments today, give retrospective effect to the reverse stock split for all periods discussed. Adjusted net income…

All right, thanks, Nelson. Like other E&P companies, we’ve started to look at our plans for 2016 and we expect to have a budget finalized in the not too distant future. But given the uncertainty in the commodity price environment, we have been looking at a number of different activity levels and scenarios and have provided a few of those for you on Slide 14 of our supplemental information packet posted on our website. The one we’ve been focused on and I think each one of us has highlighted to you is our maintained production case. With our new standard Miss Lime well cost of $3.1 million, we would expect to keep 2016 production relatively flat versus 2015 by investing $150 million to $200 million of operating CapEx with a three-rig program operating solely in the Miss. This is down from our previously communicated maintenance CapEx range of $175 million to $225 million. With all the scenarios being contemplated for 2016, we are committed to preserving our liquidity through intensely focused capital discipline and continuous improvements in operational excellence. We believe we have the liquidity needed to create value in this price environment and preserve optionality with the recovery in prices which we know will come eventually. We will continue to exploit our premier position in the Miss Lime, while explore avenues to unlock value in the Anadarko. With that, Al, we are ready to take questions.

Okay, operator, we are ready to take any questions from our attendees.

[Operator Instructions] Your first question comes from the line of Sean Sneeden of Oppenheimer.

Jake or Nelson, you guys provided some pretty helpful scenarios about next year for CapEx. Could you maybe talk a little bit more about them and maybe walk through what causes you to go with your base plan versus a two-rate case? For instance, are you guys really solving for a specific outspend level for next year or maybe just kind of talk about how you think through each of those scenarios,

As we look to the future, what we’re trying to balance is our liquidity runway and maintaining of production level that allows us to benefit when the commodity prices turn. If we were to shut down any drilling activity, then our production will go down. And if and when commodity prices return, we wouldn’t actually have enough production to significantly benefit from it. And so that’s the balance that we are trying to reach. And we think, as we sit here today, that the maintained production, which turns out to be a three-rig case, is the right balance. But we show you those other scenarios because we recognize that things change and that we may not have predicted what the right balance is. And if commodity prices change, there may be a better balance out there. So that’s the thought process that we went through to determine it, but we recognize that we are not smart enough to take a single level and say, hey, that’s the right thing to do. And we got to be nimble going forward and so we showed a couple of other scenarios so you can see how they would affect the liquidity runway and the production. But that’s the thinking we went through, Sean.

And I guess, under those scenarios or maybe even just under the base plan, is there a general sense of how you think about exiting in terms of liquidity for next year or is there kind of a base level of liquidity that you are looking to maintain throughout the year?

Again, it’s that balance. But I think at that level – Nelson, check if I am wrong, we don’t tap into the revolver until the fourth quarter of next year at the base level. So that’s how we are thinking about it if you want to sort of gauge how much liquidity we’d have at the end of the year. We would be tapping into the revolver close to year-end.

That’s correct.

And then, maybe, Nelson, for you or Jake, but with your third-lien bonds that are trading in the 30s, how do you think about using some of that available liquidity or maybe even slowing down to kind of a two-rig case here and repurchasing some of those bonds help delever the balance sheet and cut some of your interest expense?

We think about things like that, Sean. We are very mindful that liquidity is dear to us and I don’t think if we bought back bonds that that would be – they would pay back, particularly quickly, but we don’t rule anything out when you think about these things all the time. But as we sit here today, we think that our liquidity is best invested by drilling and producing oil. And so we think that’s the best path. But that could change too going forward. It’s just not on our front burner at this instant.

And so if I’m understanding correctly, the cash on cash returns, in your minds, are better on Miss Lime wells versus the third-lien bonds at the current levels?

I think so. I haven’t done the math on the third-lien bonds recently. But when we are generating 35%-plus return in the Miss, that’s a pretty decent return versus extinguishing interest, I think. But Nelson, let’s go do the math again and we will make sure that’s true.

I think the payback, Sean, has a payback period of any investment like that is part of the equation. And I would just like to say, we look at it continuously and today we feel like investing in the asset is probably the best for the stakeholders and the company.

And then maybe for Mark, when you think about 2016 and where you’re going to drill in the Miss, is there a particular focus area within the grindstone north versus south or maybe even Woods versus Alfalfa?

Yes, I think so. I think clearly we are going to be focused on the grindstone because we feel like we are getting more consistent results and our drilling will be in the Woods County area, primarily. I don’t anticipate any well in Alfalfa. Maybe one or two could pop in, but right now we’re looking at Woods County primarily.

Sean, our focus is, I think you’ve heard me say multiple times, is being real consistent and hitting singles, and we think we can hit singles in the grindstone. So that’s what we focus on.

And maybe just lastly, Nelson, can you remind me just the composition of your NGL barrels?

The percentage of product – I might have to get – can we take that offline, Sean, if you want to follow-up? I don’t have that right in front of me right now.

[Operator Instructions] Your next question comes from the line of Steven Karpel of Credit Suisse.

Following up on Sean’s question, I want to understand this a little bit better, how you think about it. Your bond documentations allow some buybacks, albeit somewhat limited, of course, but they do allow some bond buybacks. And your contemporaries have [indiscernible] wrong, but your contemporaries have been fairly aggressive in, just this morning, a couple of guys announced additional buybacks. Looking at your unsecured debt in the 60% yield, I’m not sure that we need to do too much math to figure out that that’s a greater return than on an un-risked basis or risk basis than drilling actual wells. So explain to us what the resistance is to actually executing bond buybacks considering the magnitude of debt you have and the need to reduce debt in the structure?

I think, Steven, you touched on it yourself, which is the limitations in our documents as to how much we can do. I don’t think we can do very much. Nelson, check me if I’m wrong, but I don’t think we have a ton of flexibility to do that. So that’s not going to be – that may be helpful, but on a fairly limited basis, it’s certainly not a silver bullet.

Looking at your documents and looking at the price of the bonds, it appears to us that you actually can do a pretty significant amount of the debt. And maybe it’s not the silver bullet, but maybe, quite frankly, individually, there is not one transaction that’s going to be a silver bullet, but this actually is pretty meaningful.

Nelson is here shaking his head, and I’m trying to think. I don’t think we have a ton, but we are happy to look at some more. We’ve been focused on the operation and producing these results in the third quarter. We are not averse to doing smart financial transactions if they are indeed smart and are consistent with maximizing our optionality for when commodity prices rebound. But we will have to take another look at that, Steven. I haven’t done the math on that one either. Sean was talking about second liens and third liens rather, and I haven’t done the math on those and we can certainly do the math on the unsecured as well.

So then maybe talk about where the proportion of the business where you are focusing your time in. How do you perceive that the strategic game plan is to work out of the capital structure aside from just an improvement in commodity price. Can you talk about – obviously, you have done a great job with the asset and your operations team has done a great job in proving that you can make returns, but can you walk us through how you work out of the capital structure barring a commodity price – a significant commodity price recovery?

I’m not sure I understood all of that. So can you run that for me again?

I’d like to maybe understand some of the more tactical things that you are doing with the capital structure given the debt burden that you face. Obviously, if commodity prices recover to year plus levels ago, then you are in a much better position. But aside from that, maybe can you talk about what you are doing?

I think we’ve touched on things that we conceivably could be doing, but right now we don’t have a current plan to do anything in particular with the capital structure, although that can change. So we’re looking at the operation. We’re focusing on the organization, obviously, on continuing to hit those singles that I talked about. At the same time, if there is a good opportunity out there to do something smart with the capital structure, then we will do it. But we obviously aren’t going to telegraph any plans on that and right now we don’t have any plans.

At this time, there are no further questions. I would now like to turn the floor back over to Al Petrie for any additional or closing comments.

Thank you. I think Jake has a few closing comments.

Just briefly, our accomplishments in the third quarter give us a lot to be excited about. We have proven our ability to quickly respond to the downturn, both financially and operationally, and that will have significant time and flexibility to allow us to manage our business in a disciplined way through an extended period of low commodity prices. We thank you all for joining us today and we look forward to talking to you in the next quarter.

Thank you. That does conclude today’s conference call. You may now disconnect.