Good afternoon, and welcome to SM Energy's Fourth Quarter and Full Year 2023 Results Webcast. Before we get started on our prepared remarks, I'll remind you that our discussion today will include forward-looking statements. I direct you to Slide 2 of the accompanying slide deck, Page 7 of the accompanying earnings release and the Risk Factors section of our most recently filed 10-K, which describe risks associated with forward-looking statements that could cause actual results to differ. We will also discuss non-GAAP measures and metrics, definitions and reconciliations of non-GAAP measures and metrics to the most directly comparable GAAP measures and discussion of forward-looking non-GAAP measures can be found in the back of the slide deck and earnings release. Today's prepared remarks will be given by our President and CEO, Herb Vogel; and our CFO, Wade Pursell. I will now turn the call over to Herb.

Good afternoon and thank you for your interest in SM Energy. We are very pleased to report our excellent 2023 financial and operating results. We measured up very well against each of our 2023 objectives! Today, we will spend more time looking forward, into our plans for 2024. We are well positioned to slightly increase activity and deliver an attractive return of capital to our stockholders, initiate development of properties acquired in 2023 and maintain our low leverage. Turning to slides 4 and 5 and starting with key 2023 results. How did we measure up against our stated strategic objectives? We met or exceeded each objective as I will step through now. Our first objective was to deliver increased return of capital to our stockholders. We generated substantial free cash flow of $509 million and returned $300 million to our stockholders. This is an approximate 7% yield for stockholders and return of approximately 60% of the free cash flow we generated. This included the repurchase of 6.9 million shares at an average price of $32.89, for $228 million, and fixed dividends paid of $72 million. Notably, this is four times the $77 million returned to stockholders in 2022, and we reinvested in our portfolio, transacting approximately $125 million in prospective leasehold positions. In addition, we set a company record for proved reserves, ending the year with 605 MMBoe, up almost 13% from yearend 2022, despite a reduced SEC pricing environment. At the same time, we improved our balance sheet, reducing net debt by $171 million to $969 million, which met our objective of less than $1 billion net debt. Our allocation of free cash flow is intended to drive long term, sustainable profitability, and share price appreciation. Our second objective was to focus on operational execution, including excellent safety and…

Thanks Herb. Good afternoon. As a reminder, we are a premier operator of top tier assets delivering a sustainable return of capital. Empowered by our strong balance sheet and world class technical team, we are poised to repeat this success. We certainly demonstrated that in 2023 with solid operational execution, driving results that exceeded street expectations. Those results are actually quite straightforward, so let’s spend some time looking forward into 2024. The 2024 plan is designed to support each of the three strategic objectives that Herb just outlined. As we have discussed over the years, our methodology is to develop a multiyear plan that optimizes free cash flow through the most capital efficient development program. This generally results in flat to low single digit production growth. Starting with slide 10. The 2024 capital program increases activity over 2023, which reflects our counter-cyclical approach in a deflationary environment. We expect the program to deliver an attractive free cash flow yield, while enabling the team to initiate delineation and development of properties acquired in 2023. Total capital expenditures are expected to range between $1.16 billion and $1.2 billion. Key inputs include. First, activity level. The Company expects to drill and complete 115-120 total net wells with roughly 60% in the Midland Basin and 40% in South Texas. We plan to retain the 4th rig in Midland for the majority of the year. Second, cost. The cost of increased activity is expected to be largely offset by realizing certain efficiency gains, which include running a simul-frac fleet for the entire year in Midland and drilling 25-30, 15,000 foot laterals, as well as recognizing around 10% on average year-over-year deflation. We are seeing deflation essentially across the board on larger items, with the exception of labor. As a result, well costs per foot to…

Thanks Wade. Turning to slide 16. Let me wrap up the call by focusing on some specifics of what we’re doing to extend our high quality, low breakeven, and high-return inventory. At Klondike, the 20,700 net acres located in north Martin and Dawson counties, that we acquired last summer. We have drilled one science well from which we gathered log and core data, and plan to start acquiring 3D seismic in March. We conduct this work in order to optimize our development plans. Our 2024 program is expected to include development of three pads having a total of eight to nine wells. First completions are expected to come online in June, meaning we should have initial results to report by the end of the third quarter. As you know, some of our most prolific RockStar area wells are drilled into the Dean and located in North Martin about 10 miles away. We added locations in Klondike based on offset well data and we expect further delineation and development to bring upside. The acreage you all referred to as stealth includes approximately 9, 100 net acres adjacent to our Sweetie Peck position in Upton and Crane Counties. We have not yet counted any inventory from this acreage acquisition and, while we have a primary target, we will evaluate multiple intervals. We are excited to see well results on this acreage later in the year. With that, let me thank you for your interest in SM Energy. I look forward to our live Q&A call tomorrow morning.

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