Good morning ladies and gentlemen, and thank you for standing-by. Welcome to Gulfport Energy Corporation’s Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host Jessica Antle. Thank you. You may begin.

Thank you and good morning. Welcome to Gulfport Energy Corporation's third quarter 2022 earnings conference call. I am Jessica Antle, Director of Investor Relations. Tim Cutt, Gulfport’s Chief Executive Officer will not be on today’s call due to a family emergency. Bill Buese, Executive Vice President and Chief Financial Officer will provide today’s scripted remarks and will be joined by Michael Sluiter, Senior Vice President of Reservoir Engineering; and RJ Moses, Senior Vice President of Operations and Drilling for the Q&A portion of the call. I would like to remind everybody that during this conference call, the participants may make certain forward-looking statements relating to the company's financial conditions, results of operations, plans, objectives, future performance, and business. We caution you that actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we may reference non-GAAP measures. Reconciliations to the comparable GAAP measures will be posted on our website. An updated Gulfport presentation was posted yesterday evening to our website in conjunction with the earnings announcement. Please review at your leisure. At this time, I would like to turn the call over to Bill.

Thanks, Jessica, and good morning everyone. I’ll begin this morning with a brief summary of third quarter highlights followed by an operational update in both of our asset areas. I will then provide a high level overview of our third quarter financial results, liquidity position, return on capital initiatives, and address the guidance updates provided in yesterday’s earnings announcement. The third quarter marked the most active period of our 2022 operational plan with us investing a total of $141 million of capital between our two operating areas. Our production averaged 915 million cubic feet equivalent per day for the quarter, which is down from the second quarter, primarily due to the timing of our development program, but was in-line with our expectations. Our financial position remains strong and we exited the quarter with a leverage ratio of 0.9x and liquidity of more than $400 million. We continue to execute on our share repurchase program and have repurchased approximately $233 million year to date, decreasing our outstanding common share count by 10% and utilizing a significant percentage of forecasted 2022 free cash flow. Alongside yesterday's earnings announcement, we also issued our 2022 corporate sustainability report. The report is a direct reflection of Gulfport's continuous improvement culture and we are very proud of the progress made on several fronts, including reducing our greenhouse gas and methane emissions. We strive to reduce our environmental footprint and as part of the analysis, we are conducting a formal GAAP assessment to improve our company practices and policies regarding emissions management. This analysis will also assess the measures required to comply with the monitoring requirements for gas certification. We look forward to continuing to share our ESG journey with you and believe the CSR will serve as an important resource for investors in the future. Turning…

Thank you. [Operator Instructions] Our first question is from Neal Dingmann with Truist Securities.

Good morning guys. Thanks for the time. Bill, just wondering how you, Tim, the Board, to sort of think about – when you think about shareholder return versus growth. Obviously, it's a heck of shareholder return with the payback that you outlined in the release. I guess my question is, given the size you certainly have the inventory, it sounds like you are scaling up thoughts about maybe pushing growth versus maybe basically taking some of that free cash flow and growing more versus paying that out?

Hey, Neal. Good to hear from you. It's a good question. I mean, I will remind you that we are growing 5% next year and then we have that 5% CAGR for the next three years. So, we are doing some growth and we're always on the lookout as we've said in prior calls for additional bolt-on and leasehold opportunities. We'll continue to do that and push that front, as well as look at maybe slightly larger acquisitions as well. So, I think growth is definitely [on our mind] [ph], but what's left, we will certainly return to shareholders is our plan at this point.

And do you think buybacks will continue to be the primary allocation there?

Yes, I don't want to get too far over my [skis] [ph], but I mean, we still have the buyback program going now. We have probably enough to capacity to continue doing that into the fourth quarter and early in the first, but we'll have some additional color probably on return to capital initiatives on our next call. It’s something we continue to evaluate and discuss with the Board. So, it is definitely front of mind, Neal, and we'll hopefully have more to share with you next time we gather.

Great. And then one just quick one if I could. It sounds like your fourth quarter op cost, you're pretty confident those will be down handily, is that largely, I think you talked about a lot of that due to the increased production. So, I'm just trying to get a sense of, I think you've talked about this before. What portion is of cost is fixed versus variable that obviously production to be helped driving that down?

Yes. I don't know if I have an exact number, but GP&T is obviously the largest part of our cost structure and there's [MVCs] [ph] tied to that. So, as we bring these additional wells on in the fourth quarter, certainly on a unit rate, things will go down and our LOE will go down as well. But I mean, the GP&T is certainly the largest piece of our cost structure.

Got it. Okay. Thank you.

Our next question comes from Tim Rezvan with KeyBanc Capital Markets.

Good morning, everybody. Neal, kind of hit on I guess one of my questions, repurchases versus the dividend. And Bill, I guess, you will get more color in fourth quarter earnings, but we see a stock that trades about $9 million worth of value per day. So, I'm just wondering like how much is that a factor in, kind of how sustainable repurchases are? Because I know there's – it's countering. The liquidity impact is probably detrimental in some regards. So, just curious your thoughts on that.

Yes, that is a good question Tim, and it's nice to hear your voice again. It's been a while for me anyway. But it's definitely something we talked about and it's real. When you're doing that, you're obviously impacting the liquidity. So, it's something that is front of center. Our current authorization isn't going to cause any problems, isn't going to trip anything. We have enough liquidity out there to continue at least through that and as I alluded to, we'll continue to evaluate things and we can't do it there, you can't do it forever. So, to your point, we'll have to let to branch out a bit and that’s something we look forward to sharing with you in the future.

Okay. Thanks, Bill. And if I could pivot to the 2023, you put some guideposts out there. I'm just curious what gives you all in this high inflation environment, what gives you confidence of this kind of less than a 5% increase in year-over-year CapEx? Are you pretty much contracted on that or just kind of curious why you felt confident to give that kind of range?

Yes, I'll start and I'll probably hand it to RJ to give a little more color. But I mean the short answer is, yes. We saw most of our inflation already in 2022. We didn't have a lot of, coming out of bankruptcy we didn't have a lot of contracts in place as we entered into 2022. So, we felt the full front of that about 25%-ish, if you will, in 2022. So, we're not anticipating additional. And to your point, we do have most of our service contracts and tangibles locked down. But I'll turn it over to RJ to see if he has any additional color or comments on that.

Yes. Thanks, Bill, and good morning. And I'll just add, if you think about how our program shaped for 2022, again the back half as you're aware was really loaded with a lot of our activity and really what we're doing is, kind of moving that same program forward using a lot of the same services. And today, we've got most all our services and tangibles either contracted or very significant line of sight on what that looks like going into next year. And so a lot of the inflationary pressures that we realized the back half of this year, kind of had already flown into next year. So, we don't really see a significant uptick going into 2023 like others may.

Okay. Okay. Thank you. And then if I could sneak one more in on that 2023 outlook, you've talked about this 5% growth CAGR for multiple years and 2023 being slightly above that, is that a tactical decision based on prices trying to get incremental on the hedge volume or is that just more an output from, sort of this heavy sequential growth in the fourth quarter of 2022?

Yes, it's a [little output] [ph]. Tim, we're obviously continuing to refine 2024 and 2025, but it’s more of an output more than anything else just with the way the development plan is laid out in the timing and whatnot into the fourth quarter and beyond.

Okay, great. And then if I could ask one final one. You talked about the [MVC] [ph] impact in the third quarter, we assume that would not be an issue going forward given that the growth we're expecting in the next couple of quarters?

That's correct. Going forward in the fourth quarter and actually beyond, we don't anticipate that being an issue for the next couple of years.

Okay, alright. Thanks so much for your time.

Got it.

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to management for closing remarks.

Thanks and thank you for taking the time to join our call today. If you have any additional questions, please do not hesitate to reach out to our Investor Relations team. Thanks again and this concludes our call.

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.