Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2024 SandRidge Energy Conference Call. [Operator Instructions] as a reminder, today's call is being recorded. I will now hand today's call over to Scott Prestridge, SVP of Financial Strategies. Please go ahead, sir.

Thank you, and welcome, everyone. With me today are Grayson Pranin, our CEO; Brandon Brown, our CFO; as well as Dean Parrish, our COO. We would like to remind you that today's call contains forward-looking statements and assumptions, which are subject to risks and uncertainty, and actual results may differ materially from those projected in these forward-looking statements. We may also refer to adjusted EBITDA and adjusted G&A and other non-GAAP financial measures. Reconciliations of these measures can be found on our website. With that, I'll turn the call over to Grayson.

Thank you, and good morning. I'm pleased to report on another quarter and that the company's activity continues to translate to free cash flow from our producing assets. Before expanding on this, Brandon will touch on a few highlights.

Thank you, Grayson. Despite the downdraft of natural gas prices during the period, the company generated adjusted EBITDA of nearly $15 million. As we have pointed out in the past, our adjusted EBITDA is a unique metric for SandRidge due to us having no I and very little T given that we have no debt and a substantial NOL position that fuels our cash flows from federal income taxes. On the I portion, we in fact, generated $2.7 million of interest income during the quarter from cash held in various high-yield deposit accounts. The company initiated a return of capital program last year with total cumulative dividends paid to date of $141 million or $3.81 per share, including the onetime dividend of $1.50 per share paid on February 20 of this year. In addition, our Board declared an $0.11 per share dividend in Q1 2024, which represents a 10% increase over the regular way dividends paid in 2023 and was paid on March 29. Our Board declared another $0.11 per share quarterly dividend last week that will be paid on May 31, 2024, to shareholders of record on May 17, 2024. Cash, including restricted cash at the end of the first quarter, was more than $208 million, which represents over $5.60 per share of our common stock issued and outstanding. The company has no term debt or revolving debt obligations as of March 31, 2024 and continues to live within cash flow, funding all capital expenditures and dividend distributions with cash flow from operations and cash held on the balance sheet. Commodity price realizations for the quarter before considering the impact of hedges were $75.8 per barrel of oil, $1.25 per Mcf of gas and $23.65 per barrel of NGLs. As alluded to earlier, we have maintained our large federal NOL position, which is estimated to be $1.6 billion at quarter end. Our NOL position has and will continue to allow us to shield our cash flows from federal income taxes. Our commitment to cost discipline continues to yield results with adjusted G&A for the quarter of $2.8 million or $2.03 per BOE. We continue to generate net income for our shareholders. During the quarter, we earned net income of approximately $11 million or $0.30 per basic share and net cash provided by operating activities of approximately $16 million. The quarter concluded with the company producing approximately $15 million in free cash flow for the quarter, which represents a conversion rate of approximately 99% relative to adjusted EBITDA. Before shifting to our outlook, we should note that our earnings release and 10-Q provide further details on our financial and operational performance during the quarter.

Thank you, Brandon. I thought it would be helpful to walk through some of the company's highlights, management strategy, operations and other business details. As I mentioned previously, we had positive results in free cash flow this quarter while converting over 99% of EBITDA to free cash flow. Production for the quarter from our Mid-Con assets averaged over 15 MBOE per day, with oil volumes benefited from our prior development in the Northwest Stack area. While we did experience higher-than-normal seasonal downtime associated with cold weather earlier in the quarter, our operations and field team did a great job in responding and bringing wells back online. Dean will expand on operations later in the call. The company's largest natural gas purchaser remained in ethane rejection during the quarter that has shifted to recovery in April. The duration of ethane recovery is dependent on the dynamics of pricing between natural gas and ethane moving forward. NGL volumes will increase while ethane recovery as more ethane is extracted out of the natural gas stream, which could also benefit total BOE volumes. I'll just pause for a moment to revisit the key highlights of SandRidge. Our asset base is focused in the Mid-Continent region with a primarily PDP well set, which do not require any routine flaring of produced gas. These well-understood assets are most fully held by production to long history, shallowing and diversified production profile and double-digit reserve life. These assets include more than 1,000 miles each of owned and operated SWD and electric infrastructure over our footprint. This substantial owned and integrated infrastructure provides the company with both cost and strategic advantages, bolstering asset operating margin to reduce lifting as well as water handling and disposal costs. And combined with other advantages, help derisk individual well profitability for a majority…

Thank you, Grayson. Let's start on our capital program. This year, we plan to complete 14 artificial lift conversions as the company continues to focus on high return and value-adding projects that provide benefits such as lowering forward-looking costs, enhancing production on existing wells and further moderating its decline profile. The systems we have and will be installing are tailored for the well's current fluid production and will reduce the electrical demand from the current artificial lift system and is key to decreasing future utility costs. In addition to our artificial lift conversions, our production optimization campaign this year includes fuel completions, accessing previously unstimulated intervals, recompletions that would add new uphole zones and proven productive formations and refracs that would restimulate quality reservoir. Activity and first production for a majority of the completion, recompletions and refrac projects will occur in mid- to late second quarter. Given the lower natural gas prices in the near term and that our Mid-Con assets are 99% held by production, which cost effectively preserves the tenor of our development options, we did not operate a drilling rig this quarter, and we'll defer more meaningful levels of development to maximize returns on our inventory in an appropriate commodity environment. That said, we will continue to monitor commodity price dynamics and maintain flexibility to adjust, as we have in the past, while being disciplined in the near term. Commodity prices firmly over $80 WTI and $4 Henry Hub over a competent tenure and/or reduction in well costs are needed before we would return to exercise the option value of further development of well reactivations. The focused efforts over the past several quarters in optimizing our wells production profile and cost focus have contributed to flattening the expected base asset level decline of our already producing assets…

Thank you, Dean. I wanted to circle back briefly to reinforce a few [ set ] points on commodity prices. The first is that a majority of our producing properties are economic down to $40 WTI and $2 Henry Hub. In addition, while oil made up 15% of our total production this quarter, it contributed over 50% of oil and gas revenue. Current natural gas prices around $2, the forward-looking future curves remain in contango and a recent strip projected to nearly double spot price by this winter. Also, WTIs remain constructive in the high 70s to 80s. While we have judiciously decreased capital spending in light of natural gas prices, more significant reduction in the oil prices and a structural change in natural gas futures would be needed before we implemented more severe steps like material proactive well curtailments. However, we will continue to monitor commodity prices and have the financial and operational flexibility to make further adjustments in response to positive or negative commodity prices in the future to prudently steward the business and optimize cash flows. That said, and to reinforce my earlier comments, SandRidge's value proposition is materially derisked from a financial perspective by our strong balance sheet, robust net cash position, no debt, financial flexibility and approximately $1.6 billion in NOLs. Long and short, the company is well positioned to navigate if not leverage, i.e., M&A, the current landscape. While we have prudently reduced activity near term, a tempered commodity price environment could be constructive for M&A. Our producing Mid-Con assets will continue to generate cash flow near term. With that recent strip, natural gas price is projected to increase over the next year plus. In the interim, the lower natural gas and NGL price environment could present more cost-effective opportunities for acquisitions, which would…

At this time, there are no questions. This does conclude today's call. Thank you for joining. You may now disconnect your lines.