#OUTLOOK 2019 STUCK IN PROCESSING FREE#

Our operating teams are second to none and we'll seek to continue to find innovative ways to create value on new acreage while improving margins and maximizing inventory. We have proven our ability to capture value adding transactions in today's competitive A&D market. We have redoubled our commitment to ESG excellence and are proud to be pursuing multiple projects that will reduce our environmental footprint. And finally, we recognize that simply producing our products and delivering returns is not enough.

This trajectory will allow us to consider more shareholder-friendly actions in the near future and return cash to our owners. We recognize the importance of this to investors, and we'll continue to run the company with this goal in mind third, our capital structure has significantly improved, and we are focused on reducing leverage to under one times net debt to adjusted EBITDA, potentially as soon as 2023.

#OUTLOOK 2019 STUCK IN PROCESSING FREE#

Second, with an improved asset portfolio and disciplined capital investments, we are now positioned to deliver sustainable free cash flow beginning in the fourth quarter of 2021 at current commodity prices. With seven years of quality oil-weighted inventory, we have fully transitioned our development program to the highest rate of return projects. We have added more than 55,000 net acres of oil-weighted high-margin inventory underwritten at oil prices well below today's strip. First, we acquired key assets that lengthen our inventory life and grew margins through increased oil cuts. We have all the key ingredients required for sustaining long-term value creation. Laredo has always been fortunate to have a strong operational team with a track record of creating efficiencies and optimizing the development of our assets. In two short years, we have fundamentally transformed Laredo and are now focused on generating free cash flow, improving our margins, strengthening our balance sheet and operating with the highest ESG standards. Our balance sheet was heavily levered, our inventory was largely gas-weighted and the prospect of generating sustainable free cash flow was far in the future. Like most of our industry prior to 2019, Laredo was stuck in a cycle of outspending cash flow to pursue growth and to maximize production. Before jumping into our quarterly results, let me take a few moments to reflect on our key strategic accomplishments over the last two years. We are ending the fourth quarter and 2022 with strong momentum, both operationally and financially. Our strong third quarter results demonstrate our success integrating the Sabalo acquisition. If you do not have a copy of this press release or presentation, you may access it on our website at Good morning and thank you for joining us today. Reconciliations to these GAAP financial measures are included in our press release and presentation, which we issued yesterday that details our financial and operating results for the third quarter of 2021. In addition, we will be making reference to non-GAAP financial measures. Our actual results may differ from these forward-looking statements for a variety of reasons, many of which are beyond our control.

These statements, including those describing our beliefs, goals, expectations, forecasts and assumptions are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. During today's call, we will be making forward-looking statements. Joining me today are Jason Pigott, president and chief executive officer Karen Chandler, senior vice president and chief operations officer and Bryan Lemmerman, senior vice president and chief financial officer, as well as additional members of our management team.

Outlook 2019 stuck in processing