MTDR - Earnings call transcript Q1 2020 | Matador Resources Company

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Operator

Good morning, ladies and gentlemen. Welcome to the First Quarter 2020 Matador Resources Company Earnings Conference Call. My name is Danialle, 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 May 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. Schmitz, Matador. Mr. the you Schmitz, Markets will I Mac for

Mac Schmitz

XXXX Thank us for joining you, you earnings call. thank conference for Danialle, and And good first morning, quarter everyone. Matador’s

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

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

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

find connection to earnings to Finally, I slide like release you the earnings Investor remind under release with our in a can everyone on issued our would presentation website. the first that XXXX yesterday, press in addition quarter tab Relations

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

Joe Foran

everyone morning much. interest and very today’s Mac, you, in and and to We good there, time call. for thank your Thank in out you appreciate participating Matador

me the add Chairman’s both if to slides, webcast this to set information on out be remarks, quarterly conference of as let helpful A on to five additional know detail. some something planned and through Slides call you. Today, new earnings we’re and Please trying this website is release works color in for identified E today’s our

quarter another of team for beat decline across oil first crises like abrupt commend at of the you’ll the to A, coronavirus If to the Matador that Board the novel was would board. for and begin you’ll a slide XXXX and again I the professional see prices. The of good once in quarter by looking focused response and dual and their Directors Matador

a March, early these that up capital too, officers while spending can we here The last have to weeks. and are identify time to together Since challenging flows increasing spent and all Matador times. your weather ways in operating of worked and together they’re questions and cash that, lot of for reduce in available with the revenues me here Matador expenses, we six

At a a meeting joined the took paycut, to and Vice the XXXX, XX% staff on paycut take me of taking X% XX% volunteered XX% took paycut. all Presidents then of a the paycut, paycut. Presidents rest a President a Board Matador I Vice other in Executive a XX, March too. the Matador’s The Board took and the XX%

took X energy -- to announce were first other by including production cut all prices oil by roughly per $XX from barrel, quarter our oil of X. from $XX our to ranging and our in reducing the capital forecasted second count rig to at to spending first XX% XXXX oil to was to production, industry compensation cuts. very any we Among Matador XX% prominent study, anticipated one oil company steps the According our hedge of such the company

We spending, if are to further necessary. to reduce take steps prepared additional

than B, operating now spending of expected quarter, achieving group Slide throughout will lower our and look the the at you If operations to capital way led first expenses. goal the

our and for and and original costs foot, all costs average first completion averaged drilling estimates costs. were and improved completion decrease to from of of capital was in completed efficiencies $XX just a these per wells operated quarter lateral for XX% to less drilling, and completed that completion foot Our over completing quarter XXXX, estimate of horizontal and the sales $X,XXX $X,XXX savings turned Drilling equipping lateral of and operational XXXX. $XX million wells million expenditures attributable achieved per this we past for lower-than-expected than drilling

drilling expect to and reduced improved longer most X-mile costs reflecting We impact costs operational throughout decline per XXXX, to completion laterals, efficiencies, with foot being lateral the drilling service and continue laterals. of

down Matador us which right corner. the lower bring C, quarter be XXXX neutrality. to fourth And Slide of cash could results hand indicates that’s the by there flow approaching These in

You those And costs down. is think there. can see bringing steadily we’re positive that we the outlook

first previously sales. four production predicted a in set of western when milestones Ridge turned of XXXX. Rodney six achieved early in Matador wells quarter, first area end were we of this we XXXX in important significant surge the for in portion to the production the Robinson we incur Antelope asset the the had At Matador would

in all natural three a reported results rates per initial at XX of testing tested, separate press and achieved gas XX,XXX feet of cubic Matador for from barrels recently of formations As different oil wells day record test day. potential approximately million release, per collectively Robinson XX-hour

XXXX are the beginning Robinson objective three XX wells this four should These in XX% Collectively, completions groups our Breaks year. as them. and to and XX% should are measures are of will area production the Area more These and be asset turned twice incremental of wells account better when there in our of of Greater the five area than the in be Stateline production Boros summer progress. when milestones our Rustler October. wells. sales than almost make And the other to are occur Leatherneck September these expected many Rodney even wells in the for Stebbins asset the and The wells the Boros five up sales turned likely of wells to in Ray during

protect forward and move to our production XXXX, sheet businesses. we our balance strengthen priorities in and to our As midstream liquidity and are our exploration and

sheet have about of bank our balance protect and required our relationships. to preserve necessary our Many meet will to do the wondered We you liquidity whatever goals. is

look the at the of you Slide under you will first million elected another we quarter that D, and had especially appreciation bank available total end will express $XXX sincere see approximately for We loan. the have encouragement at commitment $XXX from and this million our and of we our group reserves-based of year. our received If the support wish to borrowing here base always available our

good successful possibilities respectively, one well and we exploration These one and ourselves are barrels but price Delaware XXX businesses, in all XXX outstanding. navigate XXXX and consider of million about proved in of buying current net and in as production, unexpected we times of for XXX,XXX all remainder beyond. of bring midstream acres remain natural a opportunity. as to opportunities, two BCF and and us, its We Matador’s obviously reserves, times stock shares the open Matador’s challenging will to position for such challenging and the XXXX basin assets can for and XXX gas oil as include million oil be

growth operating financial Slide reserves Matador you E each position, Board, shows reserves very owns. team proven in steady of and with staff. the when combine Matador’s individual positive these for I that The is proportionately our amount proved assets the the shareholder and remain and outlook the management confident staff

happy and As I questions point. here, here, I’m this be mentioned, would officers our take we at to your the are staff,

Operator

from from first Thank Scott RBC Hanold you. Markets. comes [Operator Instructions] And Capital our question

Your now is open. line

Scott Hanold

quarter, great and that appreciate I guys. Thanks. Yes.

I the really in full months to the of next production. think, going of curtailment of U.S. pivot narrative industry storage for to the the a the couple lot in and is

exactly guys sense and Could have You on of could yet, stretch give is your you all when the to how it’ll you Matador? obviously And for production question, case progressing case maybe shut-in your guidance. what have factored us do you And some shut-in think of base get levels start? a that you to? see that of in what sort first

David Lancaster

It’s Scott. Lancaster. Hi, morning. David Good

let So, take in order. those try to me

the that you’re percentage and have will average. to started -- June. the the have XX% be our of production XX% regard shut-in what shut-in our proceed shut-in, Delaware May anticipate the probably Eagle some with starting in in months just of to our some for question to couple beginning the that Eagle been, shut-in the shut-in We think, your in relative the were we or what Ford with of days, the question in could shut-in to will in already are production in last on And be production in Delaware Ford we’ve we to I will production to in production about of expectations we will to, our of our and in those regard and asking tomorrow.

Scott Hanold

managing give plan managing of in how improve, Okay. That’s coming next course half guys, Do with you and a to year? until flow the XX% the year, do the of wells path you great. pretty that prices do what going And XX%, the to obviously, I appreciate rates through plan -- back half you wells on those back of of strong can plan look year sense us some this on like? of you you is mean, on into on the that those that. I or

David Lancaster

Yes.

that for is most Rodney what back get wells, likely those those if Scott, I drilled the them of thinking on we may out need thing get and to time. and go right will on something and is recent wells be, the period with tests a of then production and line, do the did frack we think, wells what on we are put Robinson initial we now we with ahead will probably similar turn some

is prices that, the tested we a go other level those about, those the and with decisions and rest wells the wells, as get decisions production we depend game-time that the our then go year, as drill exist go year. particular particularly wells, lot Leathernecks, go of along. wells how will as through and are and plan the we But them Rays the to those out, of on was them kind and and through I things complete as in now, ahead the will of which we’ll of be talked as make Stateline think to looking on

Matt Hairford

add in these and saying in David just getting we’re I to which to how is what to there shut-in. wanted are setting wells regards wells

the wells where they’re he’s and expense our Stetson, done Glenn Head what and done the operate those they’re together think, his we operating all and Production, team nice have he economic of that wells on he’s -- really where and not. of is job putting I a

to We’ve teed And to ready kind to increasing stuff react got in or up that whatever decreasing that regards all market the amount to go. poised we’re of does so, that and amount.

Scott Hanold

the clear. with It Rodney the Okay. And your be as -- this Boros is just my guidance, maybe just wasn’t the continued of and in assume through curtailment Robinson question But, do wells? there you year to rest good. sounds on clear on

David Lancaster

go we the on game-time that over will those be that probably quarter. in in that reason one I the the like think, the I we able give of and -- so it’s wells closer in original in will I -- I how assumed able think, was again closer and I we fair we would expectations what guidance said, that we things something -- that we quarter to to say to second for think we’d think produce current said to some allowance what third what the return think that to be at But decisions, during we’ve next fourth opportunity expectations we’ve times that year some production to quarter those earnings have. for originally mean, just have of we’ll the I made but of I Scott were to most those half to the are. second things have But, provided, the part see wells anticipated their rates year. us the we be release update half in expect

Scott Hanold

Thank Okay. I that. you. appreciate

Operator

Thank you.

from comes Your next Jeff question Capital from Northland Grampp Management.

now Please is ahead. open. line go Your

Jeff Grampp

you for topic expectations see Can experiences on guys the kind can have for to guess, any, I past talk you of about or guys wanted that on sticking maybe draw gauge of how drawing you expectations I -- you of think to shut-ins. guys the on coming back, shut-in risk on? guys of or meaningful plan can envision you how as wells Just that these about back of that far kind is out. as bringing plan wells curious and a kind kind you

Matt Hairford

I’m sorry. go Joe, ahead.

Joe Foran

we go of do that don’t I’ll then, build and to just and have you go thing so with is one will, ifs look we number scenarios, and Matt, But, to a But, we multiple at out Jeff, plan. it. one if Yes. first we that the did finish. try what

more it’s of variable. So, lot one it’s than A price.

You lease have also terms.

You to have into also hedging your account. take

pipe wells thing we times. consistent, the to -- may there be But to and We could it methodical to it truck full think I makes what open of And one a them and where multiple Matt? shut process. easier also, do like where don’t through be so, And that. trying turn at to be be try that circumstances different we’re back. on the on scenarios then you’re few want and that we on we’re consistent want than is

Matt Hairford

Yes. secure go issues and wellhead pump to that is a that by you. easy making add making around it’s -- is shut-in the secure well I’ll on what give shut it’s that’s we vertical mechanical saying. do barrels on off, just I’ll we’re thank shut-in. day, and some Jeff, go and seriously XX that pumping are We well to say, we There one. of ready couple rod a a and XX and let’s are or unit Joe, just legacy or If the contemplate, which pretty wells to you got examples. say a Joe

is, Another event, we’ve the an due that an we actual overhaul. got well example in got ESP a for in Delaware has a that’s

And ahead do pull and the so, and that. that prepare decided overhaul ESP and appropriate hole on that in do just talked be the back earlier the to the do ESP is in thing we ready inspection then the do run tubing, to to and go out, the about

in. and to So, the team shut which want of that’s the But have of shut we we nice a wells kind done really opposite job them of Glenn spectrum. his want in identifying to and how ends

Jeff Grampp

parent. My cash is to great. back there. flow free cash the the Great I down maybe follow-up year. two it, cash decisions bank details pay that going with assume positive mentioned Mateo position midstream to the flow San release on extract a some next either that debt likely to side, free Got or that

have have how and over of that guys much that cash? conversation So, how I partner, cash a look free was us a wondering that optionality maybe just of you this that you the you kind is free reminding to your at and guess I decision, with what is flow, do Matador control with

David Lancaster

has San up a representatives Board made relationship Directors. have Five good our Hey, from Jeff. at Point. partners of working And from Matador Certainly, Five David. It’s with of very and its It’s own Point. Mateo we

would point. this the we and a And so, I would decide has between expect everything unanimous be whatever else that would partnership to decision

we But, then go we’ll partnership if that distributions each part distributions we fit. me and to wouldn’t are So, we which I’m may sure San that that use And made way the down Mateo’s made -- debt enhance that they to party are wants distributions as those the would to be pay to we some decide to of can can be just party. most can there. increase just consulted. the surprise have flow cash it each that use see to party thing each they -- the There the or also use it best for

I significant with incentives the would next of defer to wells a cash the larger think, free we in in we might of to use for Matador’s case, we have outspend along XXXX. be and part drilling expect that flow that that any would completions year provide

Jeff Grampp

it. Got

Sounds good. I time, appreciate guys. the

Joe Foran

Jeff. Thanks, your time. Appreciate

Operator

Thank you.

next question Irene from Your from Capital. comes Imperial Haas

line open. ahead. Please Your go is now

Irene Haas

a rigs, three routine Hi. Can million fourth as were color more how step or CapEx $XX? XXXX a morning. you D&C little if back of give unfold? towards wondering, would right, you Yes. you oil look to probably to quarter, with have you of completion. near into kind Good might $XX $XX was normal How I as stabilize, likely us

David Lancaster

on is it’s early little Well, yet David. Yes. a speculate probably that. I to Hey, This think Irene.

for And, $XX cautious pleased $XX I we be decided were, when of And to would be certainly the three into back or point, terms be would think with stay this probably in have And to would I in I’m then are move increasing for the always our But to XXXX. through as I oil activity. plans going we rig sure we similar we be we forward year back. to plans and either remainder that. a any initial it of adding at next we’re I with year, probably rigs. this going don’t if think to perhaps would at So, consider think

have that the would is that if the And completions have think quarter we of number then, in actually recall we I estimate down, correctly, even in I being we quarter, CapEx right, fourth with do still wells few the have. in I of fourth you’re additional but a We’ll completed, the Robinson Rodney wells our complete have completed wells lot to beginning time additional by those [ph] of quarter at as well, being would think the too. a some of Stateline Bonnie first wells be most that wells. XXXX because

Irene Haas

one the have. kind first How have does G&A year? and I quarter basis? follow-up. Do rest per I we And the the look barrel of on use number a the all that’s Okay. for -- of

David Lancaster

Can sorry. I ask it Irene? cut it and didn’t you completely. It out understand kind of again, I’m

Irene Haas

the G&A the outlook of year. rest for

David Lancaster

Okay.

think, you of we just that going a see G&A forward you’ll I provided, for good the look you year. we for rest I gave -- the pretty deck of indication if what think, of kind if the slide in we

we’ve our Xst actually that the begin in I there are from the be Those first we quarter the moments that BOE didn’t G&A pay would the few cuts Joe of some what just a per things because think, taken, we additional some reported and in G&A steps April. expect that referenced particular until down would ago.

say, or we’ve area would had that field referenced Mateo in San that here positions be XX -- made. some staff going will positions other the think think, that’s So, I expenses we Matt, maybe But I the in measurement so, from to what that forward, well. something, that working there had, have the down out some or folks of that’s to We’ve the moved on of all previous that office Dallas second way its to also begin changes in in some into see find gone Irene. we releases are they into numbers actually the begin of quarter assignments. contract our to items. in that focused real G&A And more we’ll have And cut and

Irene Haas

you. Thank

Matt Hairford

our tag out talking MaxOps that spent A where they’ve I Irene, job three David’s that’s learned. or first wanted people to just in and through have MaxOps Billy’s what transferring field, responsibilities. on field. them -- MaxCom the about and been folks the or gone two they programs, these lot of the years to are in They

so, run And and back they and them run were we’ve asked being go frack do excited all and very able spreads and about stuff. rigs that drilling to

into think perspective, better the bring it. They in have really for folks could I for and field a that when back. the field, office timing we of come out nice send so back then experience they be worked it’s will out that gain to continue experienced from them into a they’ll us to couple years even

Operator

you. Thank

question James. Freeman from comes John from Raymond Your next

now is line open. ahead. Please Your go

John Freeman

Good your include sort flow curtailments it would that like that that the David, say verify, physical is of just I Not when what you view or number kind number When just But, I assuming. shut-ins? XX% shut-in, that is these in in wanted for thing. to included of Thank on Is of roughly belabor you. rates, the to you shut-in restricted shut-in Robinson? does Rodney everybody. morning, what said XX% production you’re that as

David Lancaster

Yes. David. in shut-ins, that restricted flow. thinking I that same sorted is you or John. because got said I’m I’ve curtailments a Thank or giving for all chance shut-ins bucket. when to true. I the me Yes, It’s mean, that clarify

John Freeman

like is Rodney of it it then, sort you of possible, curtailments not out, what’s that Okay. to of versus Robinson? think much shut-ins David it is -- how but like break may with physical possible is sort the And be, happening

David Lancaster

due imagine curtailments. two-thirds other shut-ins that half, -- more to say, would I the physical maybe would is maybe I and it is probably, John, of

John Freeman

my Okay, make right. completion follow-up to got then, I’ve cadence question, just great. just sure And the that

the XQ for said and the on XX Ray in which wells, Leatherneck coming you on XQ? you basically wells July, take September-October, other this those just straddle XQ the guidance all that the them those five in half five based Boros then right So, which now those get year. prior with you you If Boros around XQ, half put in summer wells, had gave the XQ, roughly the we and so, of take details assume with I and of remaining XX and

David Lancaster

Yes.

a end the up think, maybe what’s XX it’ll the in that thirds that two completions. more through think -- to they And on just of Boros the And up at wells, October. being a a and QX in being time there’s think I most will September one come will be I like those But, QX and completions. will them bit third happen is likely end months. Ray little Leathernecks I to wells

Number at during we’re the think, and September swamp time Number two, don’t to the several going volumes I a on or a just what three them north San reasons. be. are put want pipeline on feel wells to to facilities to for are the going that initially. flows four upto one, be the Number first headed it’ll October Mateo. for three, new early get

go just open in I on of wells immediately. and things just the day out to So, we one kind all want rather think stage than

John Freeman

Dave. great quarter. appreciate, I congratulations on great. And That’s a everybody to

David Lancaster

John. you, Thank

Operator

Dingmann Thank from you. next from Neal your comes SunTrust. And question

now Please is line Your ahead. go open.

Neal Dingmann

just wanted press appears needed the sounds your or involved. at check heard But, Good much think what’s from or release haven’t double sort on wondering like I’m you’ve time too just bring probably David morning, when that, question to much of just I’m My that all. too cost and least of Matt. is or that really there is experts. or curtailments made to we It for first back? cost you wondering, not some I David, the timing shut-ins. like

Matt Hairford

what difficult question. Neal, is I on or about just Are back asking your might... exactly how it understand to bring you well didn’t thee

Neal Dingmann

Yes.

of wondered things heard a it and I lot Just stimulation get there you And bring or shut-ins, really, to again, is just back. we’ve Matt, -- needed curtail, about talk if the cost timing. I about Schlumberger from

much appear double You all want involved. check that. too I to just don’t And there’s like sort of

David Lancaster

it from Yes. wells pumping just will well. that the part, most the well I vary think take Neal, think to are But, for on I let’s legacy units.

like think said I I earlier, think, pretty that’s I simple.

close come ready You you valves, back go up. and to the them you’re on, when back and off, turn the out open unit

I lifts, think, some of different a bit of be the different type artificial have structure. wells there may that cost little

One of the we’ll talk lift. about gas just we’ll things that do,

We haven’t about yet. talked that

open shut lift, to when So, the ahead a period. back out, when we’ll work we’re up start the that go and we’ll we’ll if gas left, flowing a then, the the just if up, back we place. and not, for it’s it We’ll own, built start leave pressure start gas will; to to there, just its the well well well enough the gas shut on compressor ready standby go in compressor lifting. gas that’s gas, go valves time on And put and on

forward very move flowing, of in that are wells that flow. -- would and would that to probably you the If are few it’s shut wells which we

pressure think their off and would build up on I those kick own. natural

lot. an opportunity we we a to this place. in wells change lift that think what take to don’t system overhaul probably are or I out So, a anticipate whole got the artificial will we either few be There

Neal Dingmann

into eligible any accelerate for in is question and second potentially tax my then, you credits tax AMT could I’m might And details. be these look to that good XXXX? if David, around David. credit, just you CARES and Act all for XXXX wondering Very

David Lancaster

Yes. is The to answer yes that.

the But there’s about another a applied or of passing of $X I even AMT on accelerated I think CARES that lot normal that we there’s be in I in, function think into And act. XXXX we had coming that $X have as more credits millions have just XXXX. with never of requested yes, about tax the million new of kind a awaiting the we’re -- probably believe Act. the cycle

maybe like something altogether, $X So million.

Neal Dingmann

and good. wanted Joe, salary by to Very just the all. job example reduction And Thanks. say, of I leading nice

really guys out. stand think, I you

Joe Foran

I to could My We just their I’m paycheck done. But, our that but going too, and around won’t of else they want appreciate. And by looking And be shareholders take anybody to that thing Board I’m do. nice I want volunteer said that really to to $XX. his feelings at was ready not, because Neal. the not and a Saint -- a and be shares heroic to hurt we The with because to second do. I there I’m without appreciate thing it prompting, ready really the barrel right Chair appears Thanks, value. just Committee think we no, around thing. It mean, things were first wasn’t have went -- the I bit, the room were do means. that. we’re everybody And turned all right a right any prices question. had don’t little it. it’s to were we you XX% But, at was got any alignment thing maybe have to I year do? the our And want and been $XX down mean, we’ve immediately, the of shareholders the cut lost from to it’s that XX% raised what getting agreed clear. one Audit Board I hand, our a

on I pricing, of And right lot did right do team anything think these really that, deck through the bottom to had it’s plan, for of poor price everybody’s best X address, took and the price that were a and restructuring helpful. we hands It making Matador reposition a thing the effort the we a forward, rest of of pitched have thing everybody to been the got risk a get the really there And a things trying and base lot $XX. to so this the about a we on a the clear percentage, out that $XX the But to much and few people to hedges. executive did moving. coverage XX%, well a work and So, extra still do been people take them past I was we -- that’s XXX% these trying going a and good quarter of and keep as -- -- plan weeks, David to them from coronavirus better was as has hedges moves to and example $XX, that in. all of

take really that other the me credit, credit But, I’ll is I to Neal. giving people. you appreciate So, And it.

Neal Dingmann

We consider still Joe. you all Saint,

Joe Foran

Neal. Thanks,

Operator

your from Noel you. & comes from Thank And question Palmer. Coker Parks next

now ahead. line open. Your is Please go

Noel Parks

wells, Rodney even mention than would the and about Robinson you Boros that better expected they earlier about made ones. be the I’m wondering you that

that So, what it’s would love the about of the six what And components you frack in you just wells, more some saw attribute I that first to hear rock, was, too. wondering, the with whether effectiveness. was wondering outperformance also

David Lancaster

Well, that’s right. think I

think quality we function that rocks. the an the largely in a there some likely Stateline of that’s of best it’s entire that best very are clearly, of area -- at is feel the I And be basin. Delaware just reservoir the very like some the to

ever about parts wells. the we’ve the potential for we’re we’re so, from the I lower of the of those think just optimistic Wolfcamp liked -- the section And course, the that through And offers think I of opportunity. mean, be I very just optimistic. look of working think very proof in been mean, will the we’ve an in basin. I pudding, And a area since the it’s lot we but Avalon we’re

wells has so gone the far, well. drilling And on those

fracking to too and and to wells we’re behind stage so, long got. we start some get that what see of get these before here very anxious And to us

Matt Hairford

to said add there. David just has what I’ll

the right about a One efficiencies those there there ever having is just of that the time. at get the that lot by all of same excited There’s synergy, having lots the close rigs by. rigs of you things we’re on

We’re to we’re supervision. systems [ph] sharing some share; sharing the the of of we’re mud some able

some reduce to able We’re of that.

not troubleshooters, they’re is Our same And lot if efficiencies that. four long superintendents, these big They’re our laterals There’s access over this the well on X-mile but for staying you able a along of to go of that drilled XX us, of laterals location. first. regions already. batch will, it’s all the just We with time. a

Chris production. will know drilling. will his his well and nice job do in the with and team So, and and Billy Glenn a team are doing well team I on really his do And completions,

So, we’re wells. about those excited

Billy Goodwin

the I’ll This And see manager, MaxCom the there, have running in room, place different in same time. rigs you the the that that. just we the many on to the is at same Billy engineers. see In here. asset add you geologists see you

this group the it they’re mean, all get You of doing. slides and all million records getting had already. you looking energy time XX there, that, and different there in asset the I you the areas out And zone more I of in you’re and feel $X good. just the and and it and XX% and of categories see across saving time, different zone know things see to tune And at we’ve all they’re

Noel Parks

hopefully And the better seen then, likely, get -- turn looking to spot term longer on What minute. less just more near what that inclined we’ve forward, than sort we with coronavirus? gas inclined get term you? when wanted bring Is will to either just to past has a the see a hedging strip Are the aggressive more for in hedging more been more likely, in looking to or going the getting it while. gas you of

David Lancaster

in you natural it’s I release in Noel, think, entered some hedges gas the know, winter the likely. we mean, into probably have as already, I months. for more

would got continue look probably year, we out has on got help prices. to gas they’ve think down certainly expect already that To bit. XXX I feel will, to monitor top things the in that have be begun to I natural quite March we’ve the better floors, we between would hedges and about next And, and that So, end. move gas that some would favorable, we And something we XXX look that’s price lock-in a for bit and would us to able do. they a like little I think that but November

production have producing when do we And million. or that, of gas. BCF So, of you’re XX% XX $XX that’s BCF is XX extra year dollar or about natural a our $XX talking an

important something we’re to. paying attention and it’s that think So, I

Joe Foran

This is Joe.

if have that where Haynesville New thing do area, can a about XX% should right and at we the to other could production, the Ford The gas there we or Rustler rapidly now just that Breaks gas, we either knobs is Mexico, number XX% increase turn in we particularly in of note Eagle or to we’re our oil, in the choose so.

kind try what a backup in to either use monitoring reduce to we’re the the to commodity oil the hedging. to have we to backup of hedging we’re like So, gas, pricing. But, doing, or risk of

Noel Parks

Great. lot. Thanks a

Joe Foran

Noel. Thanks

Operator

Thank you. And your Securities. next question comes from Richard Tullis from Capital One

Please now Your open. line is ahead. go

Richard Tullis

cost on Joe, side. morning, Thanks. quarter, the Good congratulations on strong particularly the everyone.

a would line completion necessary coming a Stateline that year, you level at the this if But, day? know flattish with little rather benefiting wells year, talked rig with in production of earlier. oil a activity, of little do you’d XX,XXX from XXXX about this I later or outlook to XQ production drilling the new the be keep bit. way, CapEx think you back XXXX, on what around production to for look kind it Something

David Lancaster

-- of It’s will to Well, probably I maintain we be just we’ll X really kind we Good morning, low-single-digit small growth, believe we think, say, next able -- our we David. the Richard. if growth keep can have I that rigs. let’s year, -- even could have

there think some of a of at first probably calling and fourth we on the that side right the that’ll have first we’re the of And XX it’s -- about do XXXX. in I But, will wells batch course, over the beginning think [ph] And then, moment, part wells the quarter. will wells, into mostly that quarter. that second -- timing that’ll nicely will from that production have the expect at be you western come as the the Bonnie, Stateline, from influx be of noted, have the carry I of of Stateline we coming on significant related. dozen another we’ll wells of that first

also boost another in to expecting first year. four the time the the same team sales, the end into of to our about on drill wells early fracked the get other be the think like this in Robinson year. of also that’ll quarter, to this Antelope did Rodney’s and track, kind more year. those Rodney Ridge turned probably production would And the beginning So, And I wells quarter versus is then second the

that sustain we’re I have XXXX. production even to early part potentially in like the nice would that feel that three in boost of a likely And growth, XXXX. we some after think in even rigs in think, -- pretty I to would help level So,

Richard Tullis

if just last And the interest one for of adjusted that? my could quarters. or flattish on monetizing are follow-up. the there At What next a of two us on part couple thoughts EBITDA update of current over San all the potentially you years, Mateo, kind

Joe Foran

and part we’re and Richard, We’ve to EnLink. sold Yes. such to we Matador, Haynesville our as a and Chesapeake public the of we game. play company plant sold sold try we to first in we sold a things straight a past,

hard serious particularly give volatile But a in pricing. So, we offer, serious consideration. it if that’s one would predict, of got time the to we a

fairly As a far rigs. flat, EBITDA the as reduction you’ve going had in

good add care plentiful have to moving. So, third them think that party like our job it’s we delivering and we’re you servicing getting But, think to with need hope field those keeping and of service that there out reputation more to there’s not staff ourselves to a profile as there we take production third-party a contracts, capacity good out might contracts. And like. for really have as also good other done companies. and a we growing just of And it I

pipelines, combined relationships have. an own element and building it, production that relying -- party build of element So, needs our kind we’re to there’s other we the up the attract the -- an Stateline it’s other third to gas of not just we built of profile the but a which and is upon already areas. matter of of Area, particularly and the the think And they will are expansion Stebbins great with through time there when some and those pipelines you we

be may we so production, been little a and gas here consistent that stay and improve there fairly particularly expect Water start growth -- is to people little as wells. but more out, oil. a people pick So, pause prices flat, that’s and gas drilling

good. outlook I So, anything? pretty think the David, is

David Lancaster

No.

was think, answer. a that good I

Matt Hairford

said work anchor anchor make tenants I San But, would Joe, just it. would you Matador. look expansion, economics that, kind what the contemplated and do is to at the Mateo of this we tenant and

Mateo to on And back and third so, does the the and San say capacity at with for running San will time work that would be fact come there forward. party. go some the economics the Mateo things going we’ll And be point acreage ready I for that will expansion rigs in make the we’re and there

Operator

Tudor Thank next from from Sameer you. Panjwani And our Pickering. question comes

now ahead. is line open. Your Please go

Sameer Panjwani

unhedged wasn’t but Good following shut-ins, And of what the on This new in full that, to drilling guys book question, price guys. on Hey, is shut-in returns you cycle a a morning. if hypothetical would hedge do the to needs you more? Company the decided on place, bit think generate have basis? an onto

David Lancaster

Hi, Sameer. It’s David.

to think, question. hypothetical answer always I it’s a difficult

So, I mean, are. we kind of we are where

wells be lease of easier difficult may that operating making there with wells only expenses, you different or Different different are levels And have in are producing shutting think, regard on shut-in. from all different that make different lot wells. of decisions have to have not tops zones, I of do different considerations a situations them obligations. lift wells have kinds more wells, different into artificial go of different to times

all not And price. terms think so, there’s how simply in matter that the have through and just deciding -- And to what of of it’s simply of considerations not we’re different many much it’s going a shut-in. go I operators to just

things volume So, I commitments don’t production. -- gas have that for you and like

So, I book take things think and to all that think, I you hedge into have those know -- I account, don’t helps.

decisions. take of to think any kinds of into one you’re only account try when considerations I it’s that you number of making these that

Sameer Panjwani

about question be needs second the what was, helpful. generating price on part full that think That’s wells? think the And do cycle you as of Company Okay. new to you returns

David Lancaster

a here to but of -- anything, I price because fact question stay also of answer able service mean costs tend hand-in-hand. that’s to the ever we’re to and kind obviously And that we’ve or to of going difficult be that these some prices to think don’t and we’re for currently, Again, the wells go projecting, I that best are drill be that seen. the complete

me, that every think to variable that just we’re it’s that that you not say I But, I’m going to going that again, one $XX now, work I situation. means well will tell a So not for to drill.

the of the and where and costs a you certain of going returns whether to others. period to in portfolio drill long a got like you’ve some higher opportunities, this run. decisions have makes of the And and make wells locations economic which all prices are We wells they’re operators, are that are going low, low in and portfolio to have than terms difference be in it on

able of I in So, XXXX too. when lot about when there goes price. wells you of you, several and a we not fact following another are time decisions, low I I studies, difference construct tell just increase the it’s some hesitate into there’s that just a to a And think And a makes Cost of a lot because all making think our that that we because can them those the back prices own price economic we those give very then specific ever ago, do look we and years drilled were some prices was were that. very for most was cost. low, of to

it’s I can you’re it’s leave just thinking equation this. when so, not something out about of -- think the And you

Sameer Panjwani

the San could Maybe talk one, cash switching on you in San a liquidity was free liquidity both flow? Matador cash of Mateo facilities cash further question X positive. the about enhance flow a flow little there bit how some turns this as But, line, gears free midstream earlier on Mateo, free for business and can on implications and of terms come

David Lancaster

I think, well. do think very both Well, can we it

San assets. liquidity simply X’s the the current credit is with to San to Mateo facility, of regard in regards that we tied facility Mateo with all, place the of First to part question, have

credit X are good think at substantially road which both the of under Mateo parties then, X size the San into that’s that would collateral. happen none are, yet -- liquidity brought San facility. that are X We the the completed, assets to believe likelihood I with San So, and with on of to then San facility. down of the merger just Mateo they would increase and will facility of that would here, once X that credit very like substantially there’s And the more San is our assets credit to associated -- then Mateo time have we more the facility working because part belonging agree accomplished, Mateo. expect this once of that the we have When the sufficient that, they’ll be feel bank under group Mateo

on in Secondly, the place the doubt that up line revenue significant revenues salt plant and -- Stateline starts from Stebbins Mateo are gas the are the to and water the area, as new additional San Mateo to of I to contributing Stebbins don’t increase San gas north added with X. see in come think couple disposal there’s a Mateo and the already from which any the on begins once and X specifically travel going the is the that the new San the And already in pipelines we’re oil a from to from to wells south. we’ve from

XXXX, that San we as nice have the projected a everything and into the think and expected on as financials in bump as -- to Stateline turned I fourth beyond So, quarter and that we coming going get we’re Mateo’s at see Stebbins.

Operator

And our you. Thank last Gail Nicholson from question from comes Stephens.

now line open. go Your is ahead. Please

Gail Nicholson

NRI average do higher what Robinson and and activity level change NRI. think ‘XX? a the wells me how in Boros have you So, remind that Could Rodney the ‘XX on potentially could you is then

David Lancaster

The maybe we too. the little wells run tend we Bonnies that’s Rodney better fee leases, they’re NRIs, on probably have run, [ph] if that at full all wells minus and they’re if to the between have a to Rustler the the their mean, XX% XX% that, leases, will XX.X%. state have often XX.X%. be one-eighth XX%; tend Statelines, elsewhere if or plus You’re and leases, a Boros their XX, have Breaks XX.X%, wells mostly the they federal Anything Robinson I and probably than right. or XX.X%. wells so have on The pretty good the

have we have or couple and we’ll Rodneys. will wells, XX have more rigs Stateline you at as but a probably should We’ll I we’ll closer other so, the mean, the also sure, XX%. But year, think few those next of about drill all And wells continue running something X to a I’m XX.X%.

Gail Nicholson

Okay, ‘XX? ‘XX, at that versus you for that And kind do you look great. MVCs a follow-up is on upticks in MVC believe Mateo. And third-party, that just quantify of you correct? amount just San When ‘XX, the change, for ‘XX can then, third-party of that

David Lancaster

the not probably I yes, consider in your is, to between in answer the would we amount that’s volume San prefer just of sort But Mateo The expect would from quantify uptick it’s its confidential an the and the that, answer to standpoint customers. XXXX. question, correct.

Gail Nicholson

Okay, great. Thank you.

David Lancaster

Thank you, Gail.

Operator

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

Joe Foran

very there I think all listening times group, participating. And the we’re are is. even going we the you in come strongly effort. you areas the divisional better. strong are, our administration, these next working to most be really as to coordination Thank are know that and will -- the extra it. appreciate The on be better, is year final finish going opportunities communication processes is, We in made some of accounting, And to challenging encouraging everybody this and is good year up. And has better, everybody orders, land, thought is drilling, to much us pitched land every marketing, various and production,

We and they’ll fee-based down, the are there return. business. it’s costs up. drilling be opportunities of our Midstream lead is will mentioned, rates David growing a come some As think better

So, it’s volatility. the subject not as to

outlook Our the to encouraged prices marketing is group for rise. gas by

think lot come present some to opportunities challenges while there a does $XX will this. be oil and of So, we of also out

you, we very, answer for joining appreciate appreciate much. And much So, very call. anytime or for And please interest. us questions give very interest we this your your you We help a call. thank you can

Operator

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

Matador Resources (MTDR) 30 Apr 202020 Q1 Earnings call transcript