First quarter production volumes were 13.2 MMBoe, or 146.4 MBoe/d. Volumes were approximately 51% from the Midland Basin and 49% from South Texas, and were 43% oil.

First quarter volumes in South Texas benefited from early time outperformance from all 16 new wells turned-in-line during the quarter. This includes seven wells located in the liquids-rich northern area that have yet to reach peak rates, which came on one week early with higher liquids content than projected.

The first quarter average realized price before the effect of hedges was $43.31 per Boe, and the average realized price after the effect of hedges (post-hedge) was $43.70 per Boe.⁽¹⁾

• Benchmark pricing for the quarter included NYMEX WTI at $76.13/Bbl, NYMEX Henry Hub natural gas at $3.42/MMBtu and OPIS Composite NGLs at $30.95/Bbl.
• The effect of commodity derivative settlements for the first quarter was a gain of $0.39 per Boe, or $5.1 million.
• The realized price for natural gas continued to be affected by wider differentials at the Midland and Houston regional trading hubs.

For additional operating metrics and regional detail, please see the Financial Highlights section below and the accompanying slide deck.

Net Income, Net Income Per Share and Net Cash Provided by Operating Activities

Adjusted Ebitdax,⁽¹⁾ Adjusted Net Income,⁽¹⁾ and Net Debt-To-Adjusted Ebitdax⁽¹⁾

Financial Position, Liquidity, Capital Expenditures And Adjusted Free Cash Flow⁽¹⁾

On March 31, 2023, the outstanding principal amount of the Company's long-term debt was $1.6 billion with zero drawn on the Company's senior secured revolving credit facility, and cash and cash equivalents were $477.9 million. Net debt⁽¹⁾ was $1.1 billion.

Subsequent to quarter-end, the Company's lenders under its senior secured revolving credit facility reaffirmed the borrowing base at $2.5 billion and lender commitments at $1.25 billion.

First quarter 2023 capital expenditures of $240.7 million adjusted for increased capital accruals of $66.9 million were $307.6 million,⁽¹⁾ which included $9.9 million for the acquisition of leasehold acreage in the Midland Basin that was not considered in guidance. Capital activity during the quarter included drilling 15 net wells, of which 7 were in South Texas and 8 were in the Midland Basin, and adding 26 net flowing completions, of which 16 were in South Texas and 10 were in the Midland Basin. In South Texas, the Company optimized drilling efficiencies by replacing four planned 5,000 foot lateral wells with four average 11,700 foot lateral wells, thereby extending the drilling time of two pads into the second quarter. Capital expenditures before acquisition costs were below the guidance range of $320-330 million, primarily due to timing and deferred facilities costs.

During the first quarter 2023, net cash provided by operating activities of $331.6 million before net change in working capital of $26.2 million totaled $357.9 million,⁽¹⁾ and capital expenditures of $240.7 million adjusted for increased capital accruals of $66.9 million totaled $307.6 million,⁽¹⁾ delivering Adjusted free cash flow of $50.3 million.⁽¹⁾

Commondity Derivatives

As entered into as of April 24, 2023, commodity derivative positions for the second through fourth quarters of 2023 include:

• Oil: Approximately 30% of expected 2Q-4Q 2023 oil production is hedged to contract prices in the Midland Basin at an average price of $75.29/Bbl (weighted-average of collar floors and swaps, excludes basis swaps).
• Oil, Midland Basin differential: Approximately 4,100 MBbls are hedged to the local price point at a positive $0.92/Bbl basis.
• Natural gas: Slightly less than 30% of 2Q-4Q 2023 expected natural gas production is hedged at an average price of $4.03/MMBtu (weighted-average of collar floors and swaps, excludes basis swaps).

A detailed schedule of these and other derivative positions are provided in the 1Q23 accompanying slide deck.

^{2023 OPERATING PLAN AND GUIDANCE}

The Company is unable to provide a reconciliation of forward-looking non-GAAP capital expenditures because components of the calculation are inherently unpredictable, such as changes to, and timing of, capital accruals. The inability to project certain components of the calculation would significantly affect the accuracy of a reconciliation.

Guidance Full Year 2023:

• Guidance metrics for full year 2023 are unchanged.

Guidance Second Quarter 2023:

• Capital expenditures (net of the change in capital accruals), excluding acquisitions: $295-315 million. In the second quarter of 2023, the Company expects to drill approximately 17 net wells, of which 10 are planned for South Texas and 7 are planned for the Midland Basin, and turn-in-line approximately 22 net wells, of which 8 are planned for South Texas and 14 are planned for the Midland Basin.
• Production: 13.3-13.5 MMBoe or 146-148 MBoe/d, at 42-43% oil and 59-60% liquids.