Good day. My name is Alicia. I will be your conference operator today. At this time, I would like to welcome everyone to the Midstates Petroleum Fourth Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you, and Mr. Jason McGlynn, you may begin your conference.

Thank you, Alicia. Good morning, everyone, and welcome to Midstates Petroleum's fourth quarter 2017 earnings call. Joining me on the call today is David Sambrooks, our President and Chief Executive Officer. David will begin with an overview of our operational and financial highlights. I will then provide additional details on our operations and financials. And finally, David will make some closing comments and we will take your questions. Before we get started, let me read our Safe Harbor statement. This conference call contains forward-looking statements and assumptions which are subject to risk and uncertainty and actual results may differ materially from those projected in these forward-looking statements. Please refer to Midstates' Form 10-K that would be filed shortly with the SEC for a discussion of these risks. Also, please note that any non-GAAP financial measures discussed on this call are defined and reconciled to the most directly comparable GAAP measure in the tables in yesterday's earnings release. Now, I'll turn the call over to David for his comments.

Thanks, Jason, and good morning everyone. Thank you for joining us today and thank you for your interest in Midstates. For 2017, Midstates' performance was on target by all measures and in the fourth quarter we started executing on our market-focused strategy. During the fourth quarter, our average production was approximately 21,000 BOE per day. We generated approximately $34 million of adjusted EBITDA. In all, our fourth quarter and yearly expense in capital items were firmly within or better than the yearly guidance ranges. As mentioned last quarter, upon my appointment as CEO in November, we initiated an extensive internal review of our assets, operations, and organization, and set a market-focused strategy of targeting activity, reducing costs, generating free cash flow, and improving liquidity, to realize near-term value creation and maximum optionality. Execution of our market-focused strategy is well underway. We have reduced our rig count in late 2017 from a two-rig to a one-rig program in order to prudently develop our Miss Lime asset targeting flat production and generating free cash flow. We performed the reduction in force in January and early March to align our staffing levels with our current activity level, thereby reducing our adjusted cash G&A expense by $3 million to $5 million annually. We have reduced our overall headcount by 22% from 129 employees to a total of 100 employees, 60 of those office staff and 40 being field staff largely captured in lease operating expense. We paid down our outstanding RBL by $50 million in early March 2018, which will reduce annualized interest expense by approximately $3 million, and total debt is down to approximately $78 million. We continue to evaluate strategic alternatives on our Anadarko Basin producing properties and expect the final decision on selling or retaining the assets within the next few…

Thanks David. I'll begin with a discussion of the Company's fourth quarter and year-end earnings and costs, I'll then provide an update on our capital investments, and finish up with a discussion on our balance sheet and 2018 guidance numbers. David mentioned, we achieved daily production of 21,217 BOE per day during the fourth quarter of 2017, virtually flat with 21,358 BOE per day in the third quarter. The Company's Miss Lime properties contributed approximately 82% or 17,327 BOE per day, with the balance coming from our Anadarko Basin properties. The production mix during the quarter was 30% oil, 23% NGLs, and 47% gas, roughly in line with previous quarters. We had a net loss of $85 million or $3.39 per share for 2017, driven by a non-cash ceiling-test impairment of $125 million. Excluding the $125 million impairment, our full-year 2017 net income would have been approximately $40 million or $1.63 per share. We generated approximately $34 million in adjusted EBITDA during the quarter, up from $30 2 million in the third quarter. The increase from the third quarter of 2017 was primarily due to lower G&A expense and higher commodity prices. Full-year 2017 adjusted EBITDA was approximately $128 million. Turning to expenses, fourth quarter adjusted cash operating expenses, which include LOE, production taxes, and cash G&A, but exclude restructuring and advisory costs, totaled $24.9 million or $12.77 per BOE, down from $26 million or $13.22 per BOE in the third quarter of 2017. Our lease operating and workover expenses for the fourth quarter totaled $15.2 million or $7.80 per BOE, down from $15.7 million or $7.97 per BOE in the prior quarter. The decrease quarter over quarter was due to reduced contract labor and workover expenses. Fourth quarter gathering and transportation expenses totaled $3.5 million or $1.78 per BOE,…

Thanks Jason. As I am sure you are aware, back on February 6 we proposed an at-market, all-stock merger with SandRidge Energy. We firmly believe combining Midstates Petroleum and SandRidge Energy creates a strong formidable company that unlocks substantial value for both of our shareholders. The combination would create the leading Miss Lime producer, opening a clear path to drive shareholder value by efficiently exploiting a proven asset, delivering significant synergies of up to $70 million per year, and generating substantial free cash flow of up to $400 million over the next five years. Furthermore, our substantial combined asset base in the Miss Lime, NW STACK, and North Park basin, provide us significant optionality. Another important factor is that the combination creates meaningful scale with a combined market cap of approximately $1 billion, which should allow us to attract new investors, gain additional analyst coverage, and improve trading liquidity. We believe that all these factors have the potential to result in meaningful multiple expansion. To recap the highlights of our proposal, we have proposed an at-market stock transaction. SandRidge shareholders will own approximately 60% of the pro forma company, with Midstates shareholders owning the remaining 40%. These splits equate to an exchange ratio with SandRidge shareholders receiving 1.068 shares of Midstates for each existing SandRidge share. As far as management, our proposal has me leading the combined company and I'll put together an efficient and effective organization from our two skilled employee bases. Finally, we will seek input from our respective shareholders for the composition of our Board of Directors. To the strategic rationale for the transaction, you can see from the map on Page 13 how the two Mid-Con positions fit together very well. The combined company will have zero net debt, strong liquidity, and forecasted free cash flow…

[Operator Instructions] Your first question comes from the line of Amer Tiwana from Cowen.

It seems like you guys are performing pretty well, executing pretty well from a production standpoint, and the focus really seems to be this transaction. Can you give us a little bit color around what your conversations with the shareholder base has been? There is a significant amount of overlap between your shareholder base and SandRidge. What are some of the concerns people may have brought up? And again, in terms of the timeline, is there a timeline that SandRidge has indicated to you that they will get back to you with some indication of whether it's a yes or a no, or if they want something else in addition to what you have offered? Is there a timeline that they have talked about that they will get back to you on?

Amer, this is David. I'll kind of start with the start of that question. Since we went public with the announcement, we've had the ability to have significant discussions with the combined shareholder base. And so I would – can't really characterize any of those individual conversations. I think generally I would call them positive. I think the rationale for the merger is pretty clear and seem to resonate with many of the folks that we've talked to. We continue to have those dialogs and have an open line there. In terms of the progress with SandRidge timeline, any other details, I really can't speak directly to that. I will say, we've had pretty robust conversations, meetings, and those are ongoing. It's very difficult to define a timeline on something like this, but I will say that I think we've had some significant discussions to date and hope to continue those in very short order.

Sure. And given the amount of turnover we have seen on the management front, who are you having these conversations with, is that the advisors, is that the Board? Just trying to understand, given that there really isn't a management in place at SandRidge.

I mean I think SandRidge has done a good job of making clear to us the communication path. I've been in direct conversations with their new Interim CEO and I haven't really found any breakdown in communication there. So, I think we are having effective direct conversations with them.

Great, thank you.

And your next question comes from the line of David Beard from Coker Palmer.

Obviously Amer's questions were very helpful, so I'll just take another tack here. Can you just maybe comment in general about costs in the basin, maybe both for rigs and completion costs?

We really haven't seen any cost creep yet. We've been running basically the same rig for some time, haven't really seen any kind of pressures on the overall cost base out there. We did mention in the discussion that we've been propagating some new completion designs out there. We've tried a few things and included larger completions than we've done more recently. Those were at higher cost, not really driven by escalation of prices but just by the completions that we were choosing there. So, we really haven't seen a lot of cost creep in the basin, I would say, right now.

All right, that is helpful. And I don't know if you have any thoughts here, but it really was related to some of the comments that Continental had on full-scale development down in the STACK, which maximized NPV at eight wells, any thoughts there on NW STACK, could we expect a similar maximum NPV or is it too early to tell?

Yes, it's really early to tell. I think kind of our view is with our current asset base is to kind of watch activity there. I think it's in its not the earliest stages but there is a lot of activity going on that I think is going to give us a lot more information about the productivity around different areas and kind of what those optimum development programs are going to be. But we are in a kind of 'absorbing the information' stage right now, so kind of hard for us to say.

That's helpful. And then lastly as it relates to any possible share buyback, is it possible for you guys to do that at this point relative to Board approval and would you be precluded from doing any share buybacks just given you have Anadarko up for sale and you are negotiating with SandRidge?

I think it's just – I'd answer the question probably more generally, and that is we certainly have as a priority as we look going forward the option of returning capital to shareholders. And so, as we move forward, develop and see what our free cash flow is and what our needs are, that's always going to be an option that's under consideration for us.

All right, that's helpful. Thanks for the time.

[Operator Instructions] And we have no further questions from the phone lines at this time. And speakers, do you have any closing remarks?

Yes. Again, thank you all very much for joining us on the call this morning. We appreciate the support and we'll be available for any follow-up calls for the rest of the day. The contact information is there on the press release, our Web-site, or the investor deck. Thank you all very much. Have a great day.

Thank you.

This does conclude today's conference call. You may now disconnect.