Matador Resources (MTDR) 26 Feb 202019 Q4 Earnings call transcript

Company Profile

Participants

Mac Schmitz	Capital Markets Coordinator
Joe Foran	Chairman and CEO
David Lancaster	EVP, CFO and Assistant Secretary
Billy Goodwin	EVP and COO, Drilling, Completions and Production
Matt Hairford	President and Chair, Operating Committee
Brad Robinson	EVP, Reservoir Engineering and CTO
Scott Hanold	RBC Capital Markets
John Freeman	Raymond James
Neal Dingmann	SunTrust
Sameer Panjwani	Tudor, Pickering, Holt
Jeff Grampp	Northland Capital Markets
Gabe Daoud	Cowen
Gail Nicholson	Stephens
Matt Sorenson	Scotia Howard Weil
Richard Tullis	Capital One Securities

Call transcript

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Operator

Good morning, ladies and gentlemen. And welcome to the Fourth Quarter and Full Year 2019 Matador Resources Company Earnings Conference Call. My name is Tuwanda, and I’ll be serving as the operator for today. At this time all participants are in a listen only mode.

We will facilitate a question-and-answer session at the end of the Company’s remarks.

discussed conference will recorded Company’s be March XXXX, this and replay website reminder, earnings XX, replay Company’s the available as a is issued for being purposes through press As release the yesterday. in on the

turn now to over Coordinator call Capital may proceed. Mr. Smith, Matador. Mr. the you Schmitz, Markets will I Mac for

Mac Schmitz

full Thank for Matador’s us you, for year earnings you XXXX joining Tuwanda. Good thank morning, conference call. quarter everyone, and and fourth

measures, will Reconciliations with today financial by reference financial presenters regularly the end financial the performance. used in GAAP Resources non-GAAP financial measures of the release. at of of measuring in accordance Some contained measures calculated comparable Matador Company’s certain the press non-GAAP are with Company’s the such earnings

included may those materially based events Actual now certain morning’s Company’s results this events the reflect and reminder, is be differ such and the expectations a or from of presentation current future available. anticipated information in that As statements statements. forecasts forward-looking on future in could

Additional results contained to recent information report release earnings on differ cause its quarterly and actual could the Company’s is Form in materially XX-Q. factors that concerning most

addition press to everyone a like Events Presentations XXXX year tab. that our on earnings I would on website remind of find summarizing page to the Relations short and quarter you in can the presentation, Investor full and our on slide under highlights release, fourth Finally, our earnings the release

would Foran, I to that, over Joe Joe? our with And CEO. Mr. the now and like turn call Chairman to

Joe Foran

in today’s time introduction line participating to forego I’m Good thank Mac. the call. and Matador you appreciate going much. in morning usual to you, We Thank very the your and the order and time interest who on we’ll make for room are more to have then but the other a for in -- in today questions. the of people of couple and at Executive points, Matador, significant me with everyone Committee

their that to we’ve had help had year that better. and despite two best thanking XXXX, that And XXXX begin as first shaping the the time, quarter, simply continue I be quarter we noted is report fourth year. I’d like we’ve the flow be XXXX with to even you for and the the up very I’ve support simply the that And we had free ever in to staff, can in can and in say midstream, by now, headlines. best ever the best like XXXX, in the the looks achievements we with the XXXX, shareholders and And the will reach next field and cash months will the had

Several that clear want going catalysts. flow claim subject It’s points just we’re in is to model XXXX good can And by opportunities. number mark it the to not you free XXXX I this year do point, reaching that a will that make. to a cash be of

as capacity. March on the day, it’s and six ready will very our doubling big our late billion which early on we’ll catalyst. enable in June -- think us San second cubic in begin Then, on line Robinson full We’ll Leatherneck so in Ray start impact line July, and well budget, line, to coming time, the our and as important I in bringing Ridge. per feet Wells go mean, we’ll Mateo April, Antelope be Rodney That be and I wells. line in Rodney very to productive September. on First, will speak, Robinson to project on plant and be XX It’s X.X them to processing our and the wells. And from the wells the birth, have we’ll June, Leatherneck. coming and see have second Stateline of you will currently the then, can on be September. September, to a Ray and get will And have you important -- gas

up result is capital two-year extra it and the so So, a you when productive and superior efficiencies strategic save was obvious secure longer that. X-mile laterals. you greater these this from by were pick turning these that zone, these than other the and plan also X-mile, of delivering and point a And do that and block excited results. And, all naturally, longer are very laterals parts, could up we leases it’s to laterals. operating we’re money, associated that the based but we able acreage And, the on the

mile, be Next that’ll a X miles. have longer longer year, cases, will XX% drilling few miles laterals than of X which X.X in be the wells XX% of will our or

that’s I’ve do And know So, do. part didn’t our want we say to were you strategy us. announce we become we could that mentioned, to can it’ll We I cash you’ll that flow the going around to calendars what subject what felt opportunities. goals the that. even those going very do we see to sounds it in corner, corny, that just we but -- if clearer operating to terms is attain very, said those until mark specific free something we important do is we’re that your that of confident to means

barrels barrels you went oil we day. And consider today, growth difficult you day. rates, December our in with which the on years; look of our in about most exit And in exited a XX,XXX XXX production, at day. of one XXXX, February our of was day of the think were when a we at XXXX, back XX,XXX oil there making at a the we barrels when And public we in exited only rise steady

years, A delivered brick barrels we barrels we’ve met of exceptional over XXX a strategy to has all further at straight day for a for by accounting we’ve brick to land industry feel the operations guidance, that marketing consistency that midstream And turning exceeded this different XX come progress now in way their to groups, resulted shareholders from the a jobs seven to in we’ve projected our have or XX,XXX shout in guidance in we all think quarters. long groups, to So, we day. out Matador from groups inside. so

our to We level leases reach don’t final these that me going allow leads forward consider longer would now helped drill making business growth, half there. to being the continuing continue some plan you’ll partner. helped transactions mineral our and new to and sustain at us of out, different the these we’ve us see best rock a the and assets what look business on further we which like stopping seeds has our allows build perhaps into midstream with and have allow better -- This San to a and us in to And go place to thriving carried to my that point in that that to put how it and accelerate Delaware. anything a execution to strategic and work, we’re asset done growth Mateo us laterals leads have that see much a rate the areas, noncore start JV going planted

has we’re let’s but pace think And so, growth shareholders. under of excited I and the having a create corny, Again, it sounds the putting notion. And measured operating works notion, profitable it first value good at very that some makes still for us for more and plan, continue. long-term expect it people that in good strategy working the a and short been operating the difficult good us and value we term, little for if rock, to even of

David, leave did out? I anything

David Lancaster

No, Joe.

you’ve covered think it. I

very think, I excited we be plan to we year. in the put continue about place last

I on a plan, that everybody and we for investors that we’ve and things probably the about be little we’ve Mateo the the Stateline the farther have I things the the at very expansion think ahead ago time had were think that’s area excited And business the we’d to I would end we’re year, against year our executed Rodney And that Robinson by would. come year to that at we drilling can this the we E&P And all point a the business But laid than forward accomplish. think, production at midstream pass. all into I on come we two this well of the that think, particularly, team we’re what build laid when exactly of San Stateline part us milestones along be we’ve at achieving of have to year. see the to and we by latter And out these thought by here said the are of going and side. that the doing. businesses, side very and looking the fall out,

So we’re focused that’s to accomplishing that. looking and on forward what

Joe Foran

right. All

will the So, take Operator? we questions.

Operator

Instructions] Capital from first Hanold Scott [Operator question Our RBC with Markets. comes

open. is line Your

Scott Hanold

flow position from see or decisions now the into look you to do in do Like, the As little that neutral options? activity point? of that all into appreciate hitting flow flow at especially other cash potentially cash bit of of maintaining and yourselves ever more give look point, updates, would pretty generating strategy move that a Can free mid-XXXX, you setting the cash a free of you color? for I a timeline. period you how you that us maintaining constructive, free

David Lancaster

Scott, Hey It’s it’s David. an question. interesting

I some give of say, time. you I the at ways, best kind answer is in one maybe can I step think, would a

flow we and have to get are would think get continue could felt the we future. to year, cash for -- generate the to toward and looking best we into achieve been, we where best point I how free that last that like

I months. how flow. the you that’s But, additional we on to on use going think over can as some I that point we to to an we’re thought And to of for solidly we year want be inflection that path XX what we’re that give get us. next closer, that like feel to we XX cash can and some next focus think

I constrained think, company. an as opportunity know, don’t we you see as ourselves

that little The money environment we’ve to -- that put I terms of to in good what the there do. to can and has ways think feel work. constrained put been a for we So, capital we always -- are us current

really count. we any think I to this next plan. don’t plans through rig have increase on the year So, thinking focused we immediate X-rig the

-- year, like the better we’ll these that with excited efficiency, I travel goals an pretty the already we’ll we X-rig have. the we and at we we think, capital XXXX. feel I in promising. for we ahead. think look did in what I operating if of have strides we make improvements think, feel about the I And achieve ever count the look things as with think in in in XXXX. And terms staying outlook through like days But, you way XXXX that And we’re more can

Scott Hanold

think kind is that that you where David, maintaining context you level you high up said appreciate you like little made in rate can for all And point you’re impressive color. of that really good -- you that entry be to you’re the than But, six perspective. exit us next you growth pretty sets speaking, a on XXXX? a context, What bit in you XXXX. going rigs do of Obviously, into growth like provide have XXXX. look stronger might I like? year pretty And, generally it’s that what looks think

Joe Foran

a different got oh, a that’s It’s XXXX, next think, not you about change it do circumstances. can we’re and perspectives. at uncertainty. that’s what And is XXXX. Scott, in around of And great announcement, going know say would years. those one looking depends two -- important is I we’ve XXXX, And in doing about not in price yes, going of look economy That’s over oil what -- is years? two at to has two no we’re in to that. the these away, something I sense there’s from that. we’re number think But lot we’re we’re to almost this, just the lot changed world. there’s a what industry lot of a to why years a going until making We in it’s that the on of at and our do It’s American happen it step this, an time. anything doing take

opportunities. approaches. XXXX more We we’ll announcements definite year And for maintain do study think, that or program will under clear plans X-rig those I well the on right are working us. But, pretty And now. about that’s have and as we’re the optimistic

So, the as goes we’ll have on year along. more that

give little So, a up. how to us shape circumstances see time

Scott Hanold

do. We’ll congratulations. that. appreciate I And

Joe Foran

appreciate We it. Scott. Thanks,

Operator

Thank you.

line the from Freeman line Raymond comes Your is open. question John next of Our James? with

John Freeman

guys. morning, Good

Joe Foran

Hey. Good morning, John.

John Freeman

morning. Good

type that your of were So, only production year, think about X-mile X% up should production given a think of incorporate the track XX% change sense year the X-mile about last wells? we kind just I’m years. budgeting how in about trying you about way set to versus any we beating record wells about dramatic your had just a go I those of get how laterals limited how the the in with kind and think wells just laterals just over when a uplift when the I’m from just such data you conservatism, of the typical your -- in to ‘XX or this terrific of a of from such sort guidance, guidance from think dramatic step a And just of you longer

David Lancaster

would Yes. by it’s David. an idea get been only done of be. is throughout that that but think to we’ve done course as basin drilled Hi, lot John, the that wells have I we’ve what few expectations what also Well, to not drilled, looking the wells a at others the of

the are whether at it want seem close EUR linear, to -- have that things I pretty we be or standpoint from those field think. that look think it’s of how preferred that of we a -- mind that to I to generally

And like see standpoint. that so, from an we we’ll EUR feel

Antelope that as tends I think that first as And life. an That’s up. their a rate, past third wells it the or think for others’ we look to you have seen decline absolutely when initial rate. the bears It’s walls probably have you begin wells at maintained certainly a it’s well like clean there. we -- of take these low you flat kind Jeff little to for six quarter a what then flatter be certainly Those did in that case, think the Ridge. typically happened five Hart been months, wells initial probably not less fairly said a out or Xx in in to example, tend and the I that’s months and of little four of not that we the

inclined Spring In fact, little Bone well it I as think continued a even clean the to Second bit up.

we way to way. forecast like And that that’s we’ll the best areas of So, that have see probably we’ve in is the I approached the But wells, to. terms or it, these can Robinson we from information actual modify you it. I in accordingly, Rodney as And if think that wells we’ve try that’s we’ll how own answer to the need more the happens. things give what our Stateline approached in

Matt Hairford

for I’ll Matt. to regards on to John, longer what said XXXX laterals. David in these and just Yes. this tag is there the scheduling

percentage at While in have drill And north in past, half progress, those. so wood, XX there. basis and good we on a and most another successfully -- that having or some were case completed laterals the X-mile drilled we’re of of wells well XX, didn’t success shorter the laterals we we’ve about on we in present the knock have got of

high Billy paying torque did one these that we modifications think, recently the period. X-mile off. rig drilled to one team of -- preparation pay the these I of lateral we (X) example drives that the just it’s We’ve got things in really laterals, over for drilling is, and in systems, high big pumps and top X,XXX-foot the here including as torque off did, XX-hour started his well and really

XX-hour is So, period. to closer to too. that was drilled -- good that growing think we in the The to XXX% I it’s in a MAXCOM (X) X,XXX-foot team start. actually that close in zone. team off X,XXX-foot there of really -- done is And

plan pads. continues and Cliff into drilling for drilling the these these multiple doing side, Calvert -- built thing Chris same or team the We’ve So, drilling got to the completing well great there. efficiencies they’re efficiencies. on completion Humphreys and make the

longer I a good is laterals. to so, on start these really off the team think And

Joe Foran

ahead. Billy, go

Billy Goodwin

the the and and in our geology, MAXCOM laterals, Patrick big drill technology, X-mile and been Walsh group, non-op data we’ve using partners also with and Also out watching working go room all. our others

running little well. help our we’ve along into laterals experience the as So, us XX with bad on see able there. also they’ve now that bumps from to good over what’s same And with able to to use X-mile going been those been and and

Brad Robinson

uplift this referred conversations that reserves on add John, you basis piece. a our with just regular Netherland one auditors. we the is to I’ll about Sewell, that are These Brad. have

very as David look all that we analysis so, of carefully. on the And at wells. look mentioned, at, surrounding We

the than what B. distributions And the agreement Springs statistics, you that. doing on Wolfcamp like come than reserves is those with are, things and EUR they to Bone We’re auditors vary, different which as we’ve imagine, our is different because A, Wolfcamp can the

very that look we carefully. do so, And at

John Freeman

oil that Thanks commentary what’s And with San at ballpark end Mateo, all be on much transparently will release. the the for pipe give the you Can with be the idea in diameter investments the going oil on the end you the a of ‘XX? on I appreciate, year info. the pipe ESG a at and that then, And additional to follow-up of the provided of operational just us all front how summer. the details that’s large -- at on will pipe question, the late the relative XX%

David Lancaster

know know I if I don’t exact number, the John.

bit trapped. area. of area. Stebbins up And would being Greater that that our think is -- be be in on maybe this got on Rustler Breaks. pipe; point in now only that a the from comes be might some at Rustler from we on leave Stateline small from essentially a certainly, -- there that will would right everything at everything that I pipe will would Stebbins the from that We’ve everything Breaks be production, Wolf believe will maybe And Arrowhead little volume fairly which I still is pipe? and expect

Although, pipe that get on to options well. working of we’re on as more

of probably the by could end we the be of the oil that say to fair and be between XX% pipe by year. it’d on think the I XX%

Matt Hairford

John, this is And, Matt.

that pipe. important on have amount of there other the water I thing that’s is we’ll think, one

got So, big Rodney all got that and where and up of we’ve water at we other put can if most everything Robinson Stateline activities Stebbins we’ve these not places, set pipe. and drilling where on

XX% well So, of XXXX we’ll for that pipe be will well. water north as on have

David Lancaster

forward should think John, into as those XXXX, I well. numbers looking increase

we we have that than feel by I the So, be in think -- to potential pipe XXXX. better on XX%

John Freeman

on Thanks, Congrats the everyone. quarter.

David Lancaster

John. Thanks

Joe Foran

Billy just One active is And we’re had we’re It’s we’ve to ESG program. thing have been that getting since have injuries group up. to focus. renewed ESG to on while also of operations since course this zero his I’d no I’ll trying recorded John. step always XXXX. accident lost it And an Thanks, mention, employee know just like and XXXX. other continue time topic logged

So, his kudos and group. to Billy

Operator

Thank you.

next question line Our from of the comes SunTrust. Dingmann Neal of

Your line is open.

Neal Dingmann

Good just or Joe, my plan a is initial It area. with your increased more them new confidence Stateline the morning, team. wells now sounds have into of we I’m all on Joe development question before to in is plan all increased like completing the in this? is anything first even play of wondering, shortly. result the and this centers there drill multizone read can else the you play

David Lancaster

David, that -- morning. is Good Neal. this think I

across drainage any, or of that, -- we opposed to more and as A-Lower formation impacts team, in team with I greater works go co-develop put this it A-XY opposed we or at acreage if forward A Wolfcamp to will, be for that Stateline the consideration that play shut think this as what sort feel decided concerns would things we of that I vertically. have best what the the technical you impacts we that to Wolfcamp had the about drill think and if we sort the regard to a to horizontally as Wolfcamp get have as was strongly fact

first were drill the wells, rigs Wolfcamp out to and fur and quite the wells the like and idea of was we on couple always the those locations, complete great so, A-XY a and seemed And all additional which nine a at time. other down ought remaining we us bring although us. came we locations to That suggested to the that A-Lower boroughs the team same drill a knew to going

into incorporated we the what that’s plan. so And

philosophy the so, about sort And most a make us to sense. what -- money this for prudent it’s way us this made asset And consistent to is how effort with to an lot most area develop of possible the in our we it’s possible. of just thought just

the a in as being that’s you going so, saw And in September. increase we’re what And boroughs that’s XX result, why initial well the X from do. instead count to of

Neal Dingmann

good. And focuses second then San Mateo. my on Very question

was year’s Joe, the And after the kind footprint all foresee addition this. material You this? to last alluding third-party all point, wondering, of I’m release this just benefiting suggested in in do of I summer. expansion should completed initial from to business late amount John Matador facilities you that obviously by be of part of know

Joe Foran

Yes.

people of third-party and out with that’s like well. the and we to have services. The third their to importantly can a want good are developing And strong we job has they feel pay some team is very really that are companies companies mean, long-term you the party done I of bills. important very and relationships really worked kind provide very with quality work there

building on pleased have business of contract. thing that that us all time and what’s first firstly relations to with us is with the of the their since second them and increased The

and guy’s and Mateo So, going San have future. the relationships relationships well But, bodes our develop all think continuing hitting in additional the business. look streets those to been expanding, been I which into the for

care why marketing be we and group’s plant’s output, points going other grown out gas been the develop had in to a that’s hard interconnect options of taking downstream. of to billion with and from original are deals day. X.X And the what Rustler Breaks companies something’s to And working its feet that working cubic

And work. the shout I also has they’ve So, think suggestions of then, appreciate worked. this financially. growth. And the Five a view to help it’s contributed really and make made operationally to and out point our their and we Point accelerated really that partner, everything has And

Matt Hairford

Joe add to what Just said there.

these take We’ve will all always opportunity the is and to never first of that we -- done we the base. midstream do experiences the a business, when come they for building started one there back when model. comfort things an think, I lot we the of way going is in

and is business, based I volumes think Mateo if can and you’re we’ve at here this makes on But, lot provide, rock, the miles to a with lot economics south that paths, XX good great looking map, and there’s XX we’re they’re what the well. those of miles will going done to about to San good Matador north a And X, this with of the expanded work. expansion. going to operators, along that drill

challenge think team I San that and pipe, economics I they’re is -- the make which well Mateo to very even So, going the along to for respond third-party to volumes challenge this some better. will add

Neal Dingmann

all forward Look guys. Thanks, to the activity.

Matt Hairford

Thank you, Neal.

Joe Foran

Neal. Thanks,

Operator

Thank you.

next from Sameer Holt. Tudor, Our Panjwani of question comes Pickering, the with line

is open. Your line

Sameer Panjwani

morning, Good guys.

you in to updated to of last So, edge just to see a leading frame if And see how to potential the quarter, number X,XXX-foot an of below maybe I’m cost. expectation for getting you wanted Ridge. XXXX had foot. $X,XXX trying highlighted just Antelope D&C downside

David Lancaster

Sameer, it’s Hi, I Well, -- David. think again,

I we from put that is be the quarter. additional we out does we $X,XXX the some It had think already and that what fourth X%, savings some -- XXXX. in X% there efficiencies think think will cost what I down or reflect in

where of think over $X,XXX little So, that the I in I wells about terms come of kind think being from. think have you to that number foot, it of when a also think a you

you’re if Bone If well. a a probably Wolfcamp little more than you’re a the Spring expensive basis Second foot you’re cost well, on per

last a quarter, -- think we were getting the excuse of last is that foot wells the Third that me, highlighted getting couple Spring week and Second below Bone wells. I $X,XXX a is

foot. think to be, a little out over together, put that averages I in drill think I a there below of bit kind Bone will And see will be the certainly that so, all foot. we’ll that of a little maybe $X,XXX a it $X,XXX that -- Spring just wells But,

down will will those wells will the bring On Wolfcamp to continue than higher we to that. try to little course I of be throughout further. probably the in diligently the work that But know costs year there side, flip

Sameer Panjwani

a thoughts That’s Mateo, value okay. look the And San I you on operationally. helpful. digits. get you’ve to we’ve about to to well know on Okay, definitely high transactions closer to near be about, here. from double-digit maybe of time think seen talked I then, mid things wanted updated progressing like how recent But, over asset. What this is single multiple a somewhere

updated I if any to wanted So, see there. thoughts you have

Joe Foran

Joe. rephrase was that kind down. Sameer, question little to write trying I a just This I’m slower? of sorry. is Could it you

Sameer Panjwani

Yes, sure.

think more guys high So, multiple talked higher in market Mateo, we’ve multiple monetization. times I San and has you seen about digit on to sides mid eventual Permian been in that have an what on the XX or recently maybe the But, EBITDA for single assets.

we I so, recently. potential And on in what evolved, valuation wanted had had thoughts see any thought if there updated the to given guys you the see or process market

David Lancaster

Yes. Hey, Sameer.

been about is that some San to there’s more. that that looking for probably still Mateo. transactions for probably today there’s certain, I One the probably that there’s been two -- think think go that there we’re that have some multiple times thing monetize we I asset have that real we that; been don’t been less; tend to I we’re around XX think at value a -- I’d say things. Number I one, think

And to road. So, will be down probably that’s for the I going know be don’t point. a market the at discussion what that

of focused transportation the as new the So, some well capabilities very very Stebbins that that year have and as ground, valuable Breaks a complete come area, local frontlines, the gathering in down $XXX part million our is assets a Russell from large expansion latter on XXXX ago, we’re is coming a I which additional oil, I’m going two pipeline year, our existing we in gas including a And to and on think processing this of we’re day to started build capacity again out to to infrastructure. what expansion going nice on very water oil most well, confident time, for budget. the the going

we I of a greatly to that that’ll lot are point as Matador. to what contribute and think those by future Mateo at going So, of more I if the there is a look of assets, multiples at they be assets think to monetize created are And that discussion being to very valuable San some point.

-- premature little seems overly I’m to us So, at about not point. that concerned this it be for a

Matt Hairford

this is at San Sameer, on I’ve Yes. Matt. Mateo think And hat my I -- San we’re got that. Mateo

we’re a that regards few we’ve are plant’s in water the saying stuff a to are facilities one, I this new, unique are got saw number it’s bit best. is new, new. that assets is wells space David think as new, just disposal at I the all years in old

this XX%, team secondly, in. And the earlier, add Mateo XX% to to bit as built up well. for in San range we II is said base be has on nice step like I will third-party I a San that party little us think a Mateo I third the

the are And think San I provide that a their tenant they also of way to it’s that take volume. the that and of drill Matador. in plan going I’ on lot a comfort to Matador Mateo, at anchor and wells the strength they they said continues execute are execute

I warrant multiple. bit little a absolutely So, does think that

Joe Foran

the nature dedicated for you is have? are outlet weigh it The Sameer, in thing, have and other is is on that NGLs? -- say you other about factors And all multiple. the then The what the there or just of is that those an factors that in interconnect I evaluating last do would multiple, interruptible? commitment, the the What acreage options

options and And well bring as hook not ready last Matador the to the question. flaring we’re But feel to plants the the any. it’s positioned operational of having we up, thing complex more ready wells you’re the to now, when you’re is forward. different advantage right So, so on just as

think Matt this So, but according in built they and an that to very -- special Multiples you but opportunistic appreciate considers and the we would And -- have I and think assets. if anybody has again, said I it see. right factors. been this, getting time, and they’re David got opportunistic well. for to we’re like to quality wait vary way And

Operator

you. Thank

Capital line from Markets. Our next the Northland Jeff of question comes Grampp with

is Your line open.

Jeff Grampp

actively sale or release joint kind wondering I the assets I of if with complementary type more on or still, guys. royalty potential more some Matador. potential of just goal Was approach hoping I morning, guess think or view the you minerals in you The I guys is sticking or just evaluated for for Good wondering passive that’s kind venture to structure. minerals how potential of a XXXX. transactions business that of of of kind the of of guess kind on a side, that’s objective kind being was any mentioned characterize kind

Joe Foran

Yes. Jeff. Yes,

these business, Point, same But an what because We reserve we strategic consideration a we’ve in to active start always a most if right we partner like around a presently, JV see have find smarter. get sell them of could and here. the done opportunity it’s We minerals. then have multiple. the forward to accelerated to open in a opportunity We JV. more data, middle. business. partner forward Five you getting with term there to know a But, good of And we’re we’ve E&P we much It these to we’re while did we a our a mineral Because a areas, get like it’d some. set control looks in of operate bigger the we for and drill drill got wells, we go have a where the be the you like with know shares to we And that, and a rate build good can we other go a part is and a rock. have add minerals buy long return and and But going more areas, is that notion to ideas. from

out a structure. see a well real kind for have worked that in on win-win we it’s that a So, as you midstream similar basis of thanks and so

take ways we’d to well Now, best were us forward plan go what to more generate have in of add that as some to attractive. do -- that advantage got if it. have, to we of would could other But, And and we the we like rock and to be do puts flow. thinking, plan as that we’ve we what cash the outspend mitigate we address to opened

would the say to said but to open that’s general David, idea, -- I -- I do the don’t know this Matt? if it. other ways that’s general I

Matt Hairford

I well, Joe. said think you it

for that look number of optionality I we we asset transaction has to as And There’s just it’s to that a which think can going part with of think can sell a you of of I it, typically keep just do. transactions people. the it, an we’re do, right -- it. lot part the right you

Joe Foran

that answer Jeff? your question, Does

Jeff Grampp

period, start at if either want guess know activity be if to about, guess, obviously, never sounds of just looking terms pare rigs forward all’s that have I I And the sensitivity, -- just or XX what could volatile number the you a XXXX? then, your it. versus That good, same at is to here, to kind That’s you can guys year perfect. sensitivity back to pretty comfort levels pick six But, in keeping see I talk you level with kneejerk oil kind of wanted reaction. in talk a or if all. of And,

Joe Foran

a very question. that’s fair Jeff,

I because the on at you costs, lot proportionally. the you question costs a made to little a money what approximately, as that’s a What single proportionately And costs that price like first come is try than also of or a reason ourselves with that it’s oil, start for The about that the thing, hedged look determination, big you down and the side. got to that look a to did at XX%, always your not maybe opportunities hedge down out do is we variable. at a more as long volatility has on why is another at oil protect less XX come

XXXX goes see So, and we’ll we’re it for protected we well from pretty there. think where

-- rigs, worst. see I’m the rigs, if to me these -- we to came Bill, on couple have are wrong, and that as on worse have could they but XX far So, short-term if correct we and of we a or rigs be contracts days XX have go, as that released six

Billy Goodwin

changing drive going That’s but term them some shorter. laterals. earlier, a we on equipment doing rigs. of X-mile third -- adding the some our we’re and rigs rigs, more up right. at We and some on we’re be Matt top basis efficiently keep depends beefed and term we’ve of that, the even Like keep longer of with rigs through as what better on the mentioned doing with the and it certainly these more drill And

Joe Foran

consistently drilled is only to and I’ve your and in thing, time, you XX% turbulent landowner consistently the through this line. of rates that through most bottom goes all difficult the XX $X, make been Jeff, best times. and a -- these if your up goes Because goes years, time return doing generally And wells your to money from more last of $X.XX

line. cost hand, your of dollar whole On for the going dollar the other you get to bottom savings, every

time, when difficult your generally more drilled So, over are back powerful look most wells you in times. these

short and move Now, double but sheet that sure rig best just it’s and keep we doesn’t mean going a in keeping leave. staffing, low in don’t our cut ahead our to of at we get measured don’t lot know you make mind panic to a rigs half, balance the important mean count, with just people of But to We over term were forward. our And we would to that we period if your skis. overreact also would it cautiously prices. does pace, our

cash our conversation was mentioned be working that keep right been grow cash for to to now line now and had the size of rigs has in way we’re to And staying what sight flow. seems the that the free by with flow. see so, to And we And it and that free because program six with flow to at had grow. first flow. out position was the cash working of a to We the drilling strategy thought for the visible cash our going. is I is And us good is continuing that wells

can could Haynesville, deal good the even have couple be better they’re of a assets, in Those got some been pie. off. simpler or were the now, benefit there, the it on kind a we have, good our us an the in an as or make starting cash little for to opportunity, There’s cash Ford also upside. I’d flow, started. not offer But And assets we’ll And want good us, down be to if small if deal, of to would the return. assets minerals Eagle continue either very really a relatively flow of from complex. have but it’s part appropriate we a would attractive over. And Eagle Those be Ford some the I whole and

drilling. did turn in gotten down Eagle go well, six and time hit drilled the it You we right, Last drill we to which days. your they’ve Ford one,

could make better a David? on would just deal be So, it’s to benefit a good probably someone but else a great opportunity, that and it we be something could fit.

David Lancaster

No.

I think it you well, Joe. said

Joe Foran

Please record that.

Jeff Grampp

Joe. every down, I of wrote word it

Joe Foran

Jeff. Thank,

Operator

you. Thank

question next Cowen. Gabe Our with the of from line comes Daoud

open. is line Your

Gabe Daoud

a we guess, could guess how day on expansion, you EBITDA million Mateo XXX as XXXX for hoping of was a -- what just trying get well. I plant think I would I’m do just that CapEx be I fills and the to maybe San year Mateo, quickly run-rate sense up? San that

David Lancaster

a also in to some drill obviously nice additional then, it. it’s there that volumes to system. first -- drill that that Stateline, will I first we probably look, the portion of on be as immediately increase to I third-party the XXXX, set spring be And the full. going the fill at wells mean, will body as Well, of not continue we the when it. of added wells think we put will get

up to there. And so, from will it continue ramp

I that me run. in front when what our full. So, comes don’t to But plant we of volumes expect have completely expectation exactly certainly for is, the

we I were the in in running you there was fourth the XX% at think, noted capacity. as processing the days -- when release, plant quarter, above already were

say, day increase. as just add midstream to or certainly will and will So, volumes that or we’re that. to third to sure gas customers I’m seem continue be additional companies, we maybe often -- like will be things parties other And even finding process need from something third other one, continue ways, there covered as I party come to that terms get that it think in is going along to ways to or of our

begin filling So, I up. for plant there’s us that optionality lot that of a think to

Gabe Daoud

at that this guess cover? Just if Thanks, lot I stuff David. move and if you Matador trying exciting was this guess a through then, balance outspend a you asset you’re commodities you current I as outspend XX%, curious get sales, sheet the maybe a of XX%? both move maybe you’d just of to do much And San highlighted That’s rebound, Mateo. program as do capital helpful. But obviously it’s for Is XXXX? going sales. protection And as through drivers could But at think how asset quantify on somewhat of it follow-up, I sense point. year, a at is of looking you year, it you

David Lancaster

gave somebody I offers like, these think, -- I I Well, sound flip, to some it’s us for of don’t assets. want but

and X.X, would time that have and to the hold that we Haynesville year that Ford initiatives sheet be last X.X keep some we outspend. mindful to something been that need get X.X, of a of high talk we would consider And But, And to year that of substantially year. anywhere that mean, the something small want on percentage lot the of those and the we portions through be of think the deals it all sort to Ford be very to important I the are folks certainly about Xs, -- I value in an to And to of think I a of last including that’s the go minerals to selling in proper us. did, thought mind. think what lot what it, It’s going Eagle of able part it’s make could from think to have But, time. would all possibility this road. ago the we a a Eagle balance job we’re a substantial down doing. and the depending covering I that I managed interested I that we both terms think sure we at of did offer cover of front that we the assets. for just in we of the we excellent down

know manage have So, in continue order the protect need continue to that what and we and do, sheet. we much we We the are willing to balance to we important, do to it. to keep to balance sheet know mind it’s very of front do

exactly all that I go that what think to we’ll as brings, see along. As we

Joe Foran

our mind we just our have bank that in at thing, credit Yes. keep XXX XXX drawn. million renewed line currently and million Gabe, of the other is

or on and So we’re any we not that have sales like that flexibility that the means anything have going fore timing. to

XXXX, the much. thing little And what we of much that or one. So, difference. the cheap is last small is a important pretty sell expect oil wouldn’t oil you’d price That the you was consider in our other a alternatives largely, had too had if too not year what have price to and better very announced of then,

going trend in. be necessarily up. So into down risk think trend the again, in is what is factored don’t The I the price, it’ll your to question, take oil East account to and you and it’ll got Middle political of

we up. also work that. that incentives we even from we options we don’t we banks, the So, have from growth on our we but coming San it other have have and feel with diligently banking feel to Mateo it And is our from we we drilling that have do the to plan

of a sales, we’ve and lot infrastructure’s cost. in different just you’re attention price, and the different extent got capital efficiency, the roads of -- Haynes and we’ve past You’ve that And And out the bits the better it. cost got batteries But to sold this the cost, Ford pads. to that and going have Eagle ways. savings oil tank on there there’s low it we’ve mentioned, money the as the year, a on built is the not fact pieces and to recovered

tradeoffs. [Ph] one good transportation think there’s gap So, as did may or really our is firm operating, earning which just Coast we way The I much and job more Express close a be as Gulf not group that $X that marking. to know, you other marking.

course add And what ratio. -- -- away, be I to or for screen X.X these X.X know they that’s and the ways deal, chip the year. you So, one on we leverage why there’s X.X the but reasons of the have instead an would of you that’s over algorithm to of little your but should have up say. I finish with

but good staff only not So, watching job cost the and revenues increasing all to side. the

Gabe Daoud

lot, a Thanks Joe Definitely. and David.

David Lancaster

Thank you.

Joe Foran

you. Thank

Operator

Thank you.

comes Stephens. of Gail Nicholson question next the line Our from with

line open. is Your

Gail Nicholson

my Good savings were the questions. release, existing are morning. to taking there Thanks be XXXX infrastructure some how in cost time? Can that you how -- talked over some for wells infrastructure. changes you using utilizing and about In think guys you many going from talk about existing

David Lancaster

Hi, Yes. it’s Gail, David.

think pretty Rustler area. drill that area in pretty that benefit much the already from at -- mostly Trust infrastructure much infrastructure. we at building the we’re to out you that are -- do going Breaks Jackson would Wolf, can Things wells think existing are and the we I you Stebbins

not to be some able we’ll take there in advantage. So, Rodney do Robinson, there’s And new we there. to be take like infrastructure anything able probably going we’ll going going of that be advantage the areas Antelope infrastructure. to that’s be built Stateline, be to Certainly, new existing new to there’s infrastructure Ridge infrastructure there’s Rodney that Robinson, there; built

a So, it’s of mix. bit a

Matt Hairford

of I This I’ll just to Gail, the of just too. It’s kind Matt. is will to add that part -- add as that. all

third two to have together not Matador David said businesses or but San for that these we each we parties. the to to the also in Mateo out reach facilities there that these reach legs same San at that to every to these only Mateo little building time, up go and get one use one the of of new is Matador can extend discussion earlier something

Gail Nicholson

aspect. that potential next incentives million $XX.X year, an million II incentives? Mateo just housekeeping that or San does San then, is And million Mateo $XX for in incremental for I Great. of of include $XX to incentive The a just that with

David Lancaster

Yes, Gail. It’s both.

plus from So, it II. we Mateo be would additional to the XX.X expect Mateo earn incentives San from San I would

Gail Nicholson

to that think after years, look there? good San is a off $XX at you maybe Mateo number amount rolls for we ex do that several $XX full that next the million least when I to at use rate, run million -- And achieving to as the

David Lancaster

a a million Well, minus I we’ll -- estimate. pretty probably certainly have ‘XX, think I think and I is $XX or plus that would that -- be good mean ‘XX

satisfied that Mateo incentives have have beyond into will you the get will ‘XX I and I rolled been once think and off. San

maybe there so, likely that, something that AMI associated drilled. will that becomes more that with drilling time, that too. is XX And we’re close I those where that that think another wells it’s everything in Stebbins we come there’s expect to -- ballpark. number or wells Stateline and in But into by be And other in reasonable

begin to modeling One It of then of kind out. thing to would I produce. in -- so as when just turned predicated say, are that you wells in keep line, will mind, be on sort when it’s they get

And so, little to mean, bit going a will production. be of the same that. I the you it’s of lumpiness to see subject

thing opposed annually. Now a on basis quarterly the the Mateo about get paid San we on II is, those it as nice to side

get and the that won’t into -- to to it and will the initial But, basis. quarterly So, the once XX going we XXXX, earning quarter them toward start be threshold X sort think million, this next, next. those be million one million million, necessarily be may earning quarter. end a will we clear on of which them incentives, and It paid be it’s the of per we get XX year start XX

bit lumpiness will of it. it have little So, a to

Operator

Matt Our line open. Sorenson line next question comes from Scotia the Howard of with is The Weil.

Matt Sorenson

me Thanks for in here. squeezing

separate start there, all San to Mateo. think, just for call the questions I a based might on holding you have

forward. increase your I to that beyond. lateral in speak So, on to a continue you don’t be length increase lateral it XXXX XX% average. or your you’ll continue to think average kind XXXX and lengths if ability XXXX for maintain to side, XX% your But program the could wondering calls increase to your able of moving over guys either

Matt Hairford

is we’re think forward. now the for way this new path thinking I is about us the this

these and I think and going be ‘XX, ‘XX, norm. X.X-mile into to going even more X-mile more laterals the are

pretty XXX%, at much get or than is X is looking for I know I we’re the mile range don’t greater notion think we be XX% forward. for to going would what ever X-mile I So, XX% a and that that think but longer in there you

Matt Sorenson

since just About many I’m following sorry acres. this, of guys XX,XXX great. a that Has of Okay, the kind how And about referenced if a royalty mineral I at few then, one. but last guys net acres you housekeeping the all number you is think I Thanks. questions. royalty up on own, currently do then? changed maybe missed

David Lancaster

Matt Well, still the this -- ballpark. David, that in is right think I that’s

good So, number. I think a that’s still

Operator

Thank you.

Our of from next question line with Securities. Capital One comes the Richard Tullis

is line open. Your now

Richard Tullis

ones Good quick and Thanks. David. Two morning. Joe for me,

downtime, just Is cetera, XXXX do Looking you’ve roughly of the the level contingencies what have or et it in the into laterals, guidance? for production done at you what similar? than the to past more guidance, contingencies longer the factored kind move of

David Lancaster

Richard, it’s David.

we to I And flat say, model that’s and typically what thought just to scheduled. percent -- in would very more don’t terms meticulously -- sure thing same from these it’s wells standpoint we time. how -- little the that very board. of completed it’s It’s in been component to it’s higher as being think out I some have We is be from it’s well. there’s be a tell reasonably that probably the the at and I of modeled X then all across going pads for may you timing those lot -- very wells, that the tend say, been the in with are one do bigger had going say with and that just work how I it’ think much a probably consistent that and will past. of and we’ve bit it can just

in areas, So, other in, be anticipate have actually figuring area new going has operations I to in doing. trying doing they the coming out to good wells what and what think be to their of as our and teams with job, are charged shut are on operators

put to more a it. science little And so, we try to do

think mean that where on probably this X% that quarter. imagine that’s average And to it’s changes quarter It for about that. X%. about it that I linearly But would year. it’s is from to doesn’t just usually I

Richard Tullis

mentioned. correct? That’s areas David, wanted in helpful. call that earlier lastly, related portfolio. the asset is just acreage you. just that And were to that existing Is new comment the I verify Thank to Company’s

David Lancaster

-- work Joe we’re he Rodney the particular is. doing there absolutely work on I Richard, in we’re the referring when Robinson that we’re for in something into anticipate like go we our a other lot offer to And of areas think need to don’t of we’re it Utah that. new that to new future mean, down the feel certainly the like existing about that are portfolio assets, Delaware mentioned Stateline. talking we’re you announcing But I potential Matador. was area, assets, when doing or about Yes,

talking we we’re where right just So, are being there. about

Joe Foran

doing. have reserves, stay fleet. that because get that, better of room. the XX/X in you’ll by we I a each in real our zone There we is is that target do had MAXCOM that the and here I XX are that important room plate XX/X. you are of we engineers have haven’t want we Richard, that And think It’s thought on ago, are want room, three about about six we’re a make is real different generally right middle part been you opening MAXCOM each all new five, the about looking you’ll to went very a now. we of time. out really XX the rigs full point on and And talked permeability. But yes, to producing Yes. if the And success areas, zone more to time When we’re that the zones within preferred zones zones. there, final we is where more talk want years geologists zone, up talking from or time what And I Joe. really this different that’s our run we got there about very asset runs firm emphasize, we at When preferred can productive zones. the more

If even you you of that’s the stay preferred you whatever to might drill in more the zone, were preferred in drill you rest out zone. zone, of of out zone, the or if out if than -- even back. nothing be getting zone, the of the Whereas

target if you a But you’re better to than So expected stay going to smaller that’s XX XX generally there, have feet. a well.

drill you not may If get out zone, you of something.

Now And the much time then the it it well. back days, could zone. that ring was might he in cut zone, he after that lost that by of suspect, productive interval old in guy We redirect got and calls, the hours, you but on out the have to you’ve the several been of down. in the

you on saving we’ll can would dinner one. you but get down dramatic it’s and been every drill do to on since of one well in, take we to there. wells. the operations invite all reason and to are the and money to you we’re adding on that? working And results. day engineers want And you the So, reserves and drill to accomplishing geologists they’re group, just Billy, to leading that, delivering come And we better kudos see they’re us, have to what know lunch there, or why -- like add and these

Billy Goodwin

Yes. something Sure, needed That’s the back data, or big and that MAXCOM was XXs that’s right. This in XXs. exactly Joe.

bit little in the in the like after better data keep just watching somewhere you’re real not of drill getting drilling a particular a it’s But operators XXX stay the and XXXXs formation. other is formation it a you’ve to you trying getting day pulling after front; drilled that It’s wells without to target wholes using. lateral comparing and keeping other do the X,XXX already formation. out and big it X,XXX and part And to be find we’re like now, XXX service They to no you’re and way data the different down it And mean, different days drill they’re that. all of can I make that narrowed MAXCOM mean, you’ve up software, used better we’re hour, plus the an there’s and You’re working wells amazing. I and watching the to getting I they’re trying the in in and all smaller it next from It’s foot time. it foot a just better, all they’re drilled. with wells. a this to offset that it providers they ways it. to and mean,

Joe Foran

able been integrated is a and around make that to tightly with difference So, results has it working than we’ve operational try And only company of to geologists it we expected emphasize adds room, we’re money base. report all a generally your our that together reserve see costs see such something a -- team and and adds to it to it. we drilling because your more this have contributed saves great not is to why efficiency, better here. it and these and results effort want but you that’s the to but make And concept more engineers

think Richard, were was I last had guy asked me So hoping somebody that. questions. you the I ask to

So, put I just jump of question your people. end plug for that it I’d in our and the thought in operation on period

Richard Tullis

lend I appreciate Happy Joe. comments. No. all hand, you, a Thank to the Thanks. Billy.

Joe Foran

Thanks, Richard.

Operator

any I’d Q&A call. you, turn to Thank of conference closing call gentlemen. remarks. the to the This and ladies ends like portion for over management morning’s this

Joe Foran

what XXXX we in And, say think where you very effort. be I But, confidence It’s think value they that a will best we’ll a have we to Talk and and deliver as we difficulties. to -- well to of bit free I’m things cash fun Company. can here, deliver XXXX. have the I your to life your I pleased have we flow looking made effort little you the them. time few with year. next clearly for the fun simplify by to a proud a other year can that and that can It’s best great and later. team this forward standard quarter, to going of been are seen would close be like the

Operator

program. and the This today. your thank for concludes you Ladies gentlemen, participation

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