Greetings, and welcome to the Gulfport Energy Corporation’s Fourth Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jessica Antle, Director of Investor Relations. Thank you, Jessica. You may begin.

Thank you and good morning. Welcome to Gulfport Energy Corporation’s fourth quarter and full-year 2022 earnings conference call. Speakers on today’s call include John Reinhart, President and CEO; And Bill Buese, Executive Vice President and Chief Financial Officer. 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 make 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 John, President and CEO. John Reinhart Thanks, Jessica, and thank you to everyone for listening to our call today. To open, I would like to express my gratitude to the Board of Directors for the opportunity to be a part of the continuing evolution of Gulfport Energy. The company is positioned with high-quality natural gas weighted asset base and a balance sheet to provide optionality to enhance shareholder value. Working alongside the many talented individuals at Gulfport, we will remain focused on actions that facilitate efficient and sustainable development of the Company’s quality inventory, enhanced margins, and optimize efficiencies within our capital programs, all while maintaining an attractive balance sheet and utilizing our free cash flow to position the company for success. Further to this point, the board recently authorized the expansion of our common share of…

Thank you, John, and good morning, everyone. Turning now to our fourth quarter financials. The company continued to achieve strong results in almost every area of the business during the quarter, despite a challenging commodity price environment. We reported net income of $749 million and generated $155 million of adjusted EBITDA during the quarter. A key driver of the net income was a $437 million net gain associated with our commodity derivative portfolio. For the 12-month period ending December 31, 2022, we reported net income of $495 million and generated $768 million of adjusted EBITDA. On the capital front, we incurred capital expenditures of $102 million during the fourth quarter, consisting of $89 million in drilling and completion capital and $13 million in land and related capital, both of which were in-line with expectations. For the full-year 2022, we incurred capital expenditures of $448 million, consisting of $411 million in the D&C capital and $37 million in land and related capital. Our total incurred capital for the year was negatively impacted by inflationary pressures on our oilfield services costs, as well as supply chain disruptions throughout the year. Net cash provided by operating activities totaled $188 million during the fourth quarter, and we generated adjusted free cash flow of $33 million for the same period. Despite some weather related headwinds during the quarter, we were still able to generate positive free cash flow for the seventh consecutive quarter of post emergence. For the full-year 2022, we generated roughly $240 million of adjusted free cash flow. Moving on to derivatives, to further support our ability to fund our capital program and return of capital initiatives going forward, we have continued to enter into commodity derivative contracts since our last call. As of February 23rd, we had downside protection covering approximately 56%…

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

Good morning guys and welcome on board, John. My first question, just John, you sound confident, you guys have rated this a couple even, a couple times before you came on, just about the minimal or even no inflation this year. Just could you talk a bit about that, just what the confidence there and maybe a little bit more color on what this might lead you to do. I know, you don’t want to - I’m not expecting 2024 guide this early, but maybe what sort of opportunities you might have then, as you mentioned later on that maybe lock some things in.

Yes. Neal, good morning. Thanks for the question. As we look back at the company throughout 2022 post restructuring, I would say that the contracts or the services of the company was contracted for were pretty light, and so we were a bit exposed to some moderate inflation in 2022, perhaps maybe slightly above the peers. As we move forward though into2023, why we expect minimal is we have services contracted up throughout the year, at least the high spend services. So we feel very comfortable with where we sit on those, as well as we see with the fundamentals in the market, somewhat changing we expect towards the second half of the year. General activity will be impacted in the service side, which will create an environment for us to perhaps take a little bit better advantage in the second half of the year of some service pricing in addition to potential discussions about 2024 work. So once you combine the current environment, the inflation last year were locked up for contracts and we see the market being pretty volatile and a better kind of atmosphere moving into the rest of this year. There is some opportunity for us to actually make some headway, not only keeping it flat, but a possible reduction.

Great point. And then just wondering, I don’t know if it is still too early, you haven’t been there terribly long. Have you been able to sort of get your hand around, you guys have a lot of inventory, a lot of acreage, and I’m just wondering kind of wrap that into an M&A question. When you look at things, I mean, are there things to trade, are there, I’m just wondering when you think about sort of overall inventory and M&A what sort of opportunities you see?

Yes, it is another good question. What I will see is I have been very happy with the quality of resources that the company has in its portfolio. So we are very fortunate to have some very solid, as you see in the IR deck, some SCOOP results. Very good acreage, you can see in the Utica very good, well performance, good acreage, a lot of runway. And now we are recently talking about the Marcellus as far as the delineation, which the company has no value currently booked under. I mean, there is a lot of opportunities to actually get some - take some advantage of actually accruing that value within the company by this delineation test. So as we look at, where our focus is, we see a really quality good asset base, and we are going to be putting focus on value of the company, increasing value of the company, improving margins, protecting the balance sheet, keeping the company healthy, very attractive with some attributes that are very favorable as we navigate this kind of volatile market throughout the next 12-months to 18-months, and position the company in a really good place as we look at fundamentals changing and I guess macro changing to be a very attractive investment. So that is kind of where we are focused, I think right now, relative to positioning the company for value enhancement kind of with an eye towards the future.

And if I could just add one last one just on that macro focus you mentioned, Bill, you mentioned the hedges a little bit. Would into day’s market are you adding more hedges or would you wait until kind of see what prices do. I’m just wanting me the future curve still looks quite positive. So just I was wondering on your earlier comments, how much you are adding - are you - would you add in 2024, are you adding 2024, would you add in 2025, just your thoughts on hedging here? Thanks.

Yes. Good question. So the answer is. Yes, we are going to continue to layer on hedges, that is our philosophy as a company, we will continue to do that. We put some measures on the 24 as recently as last week. So we will continue to do that and we will as I mentioned in my comments, we started doing 23 basis, you can expect us to start looking at 24 basis as well going forward. So we take a methodical approach to hedging and we will continue to do it, as opportunities present themselves.

Glad you are doing it. Thanks guys.

Thanks Neal.

Thank you. Our next question will be from Tim Rezvan with KeyBanc Capital Markets. Please proceed with your question.

Good morning, everybody. Thank you for taking my call. I would like to start with digging into Slide 11, a little bit on your 2023 development plan. Can you talk about why you chose the spot you bid in Southeast Belmont for that Marcellus pad?

Yes. Good morning Tim and thanks for the question. As we look at our leasehold around the area, I think what’s attractive to that particularly is, we have an existing pad out there with infrastructure lease roads that we wanted to take advantage of. There is also right across river a lot of activity in the Marcellus that looks very attractive to us. So whenever you step back and take a look at, where the delineation test is, it gives us a lot of assurances that we are in a good spot here for a test. We can actually drill to the Southeast and Northwest to get a better handle on liquid’s content to see how prolific this side of the river is. So that is basically the genesis of the location in Southeast Belmont for the test.

Okay, I appreciate that. And then looking for the north, excuse me, in Ohio, a four well pad is planted in Western Harrison County, without knowing, where exactly the phased windows lie on this map. Is that a dry gas target, is that liquids rich and how are you thinking about liquid rich and dry gas overall in Ohio?

Yes. No, that is a great question. So this is targeting as it shows for late in the year for us. So this particular window here is definitely liquids rich and wet gas. As we view at the Marcellus to me is, we are going to be drilling as liquids rich as well. The economics on these things should compete with regards to capital or we wouldn’t be prioritizing. So we feel pretty bullish about where it stands as far as ranks on the economic scale. So I think as we look at it between the mix, we have a lot of liquids rich production in the SCOOP. That is a toggle for us. We have some Western type Utica acreage that we could kind of toggle for some liquids rich. We have dry gas that is solid in the core of the Utica from Jefferson and Belmont down in a row. And now we are introducing a test in the Marcellus, which gives us more optionality. So the more triggers we have to pull and the more toggles we have, for a variety of commodity type environment, depending on where prices go. It is nice to have a portfolio like that so you can kind of ebb and flow and reprioritize as needed.

Okay. I appreciate that color. And if I could sneak one last one in. I know post restructuring, you have been sort of -- there has been an intermittent program across your assets and you can sort of see the spud to pox schedule the variability across these pads. How do you think about running a more continuous program, as I guess you get through 2023 and beyond. You have talked about reducing cycle times. Is your plan to kind of get rid of these extended spud to pop cycles or I guess, how do you think about that in terms of driving more efficiencies through the business?

No, it is a great question actually, Tim. I appreciate it. I think, as we look at it from purely a pad level type rate of returns. So, minimizing and optimizing that cycle time when you spend money and when you deliver revenue. And what that means is there is going to be some overlap, certainly in 2023, where we have a couple frac crews running, and there will be times when we have zero frac crews running. And I think as long as we keep those balances within a cadence of one to two crews very manageable and quite frankly, it is much more efficient and it is much more efficient from a capital efficiency standpoint and actually a return on the investment. So, you are going to see some rigs, kind of the cadence of them will come, there will be some overlap. You are going to see frat crews somewhat overlap, but generally speaking, it will be that one and a quarter type rig and generally, one frac crew throughout the year. There will be though, however, some overlap as we look to optimize these cycle times and bring some value forward to the company.

Okay thanks John. I appreciate all the color.

Okay, you bet. Thank you very much.

Thank you. There are no further questions at this time. I would like to hand the floor back over to John Reinhart for any closing comments.

Yes, I would like to thank everybody for joining our call today. Appreciate the questions. We are very excited about 2023 and the development plan. The Company is in a great position to be able to generate free cash flow at a variety of commodity prices. And we are very focused, again, to reiterate on when actually focusing and targeting those funds to increase value of the company. And, and the toggles that we are using are the Share repurchase program, which we have recently announced an extension on, as well as incremental leasehold to bolster our total footprint and grow some scale from an inventory perspective. So, again very excited about 2023 and look forward to sharing more about the results for our next quarter’s call. So thank you very much.

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