Q2 2020 Matador Resources Co Earnings Call
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Good morning, ladies and gentlemen.
Like waters.
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Our next quarterly calls.
My name is always a year out yeah.
At this time all but.
No no downtime.
Okay.
As a copy I already talked before as a reminder, golly quarterly reports.
A replay will be good bye.
All right.
Okay.
Yes, you got that I walked away.
I will now turn the call with older telco market for about a door regiment cuisine.
Thank you Valerie and good morning, everyone and thank you for joining us for Matador second quarter 2020 earnings Conference call.
Presenters today, we'll reference certain non-GAAP financial measures regularly used by matter resources and measuring the Companys financial performance.
Conciliations of such non-GAAP financial measures with comparable financial measures calculated in accordance with gap or could change at the end of the company's earnings press release.
As a reminder, certain statements included in this mornings presentation, maybe forward looking and reflect the company's current expectations or forecast a future events based on the information that is now available.
Actual results and future events could differ materially from those anticipated in such statements.
The information concerning factors that could cause actual results could differ materially is contained in the company's earnings release and its most recent quarterly report on form 10-Q.
Finally in addition to our earnings press release, I would like to remind everyone. So you can find a slide presentation in connection with the second quarter 2020 earnings release under the investors relations tab on our website I'd now like turn the call over to Mr., Joe for in our Chairman and CEO Joe.
Thank you back and good morning, everyone and thank you for participating in today's call. We appreciate your time and interest in Matador very much similar or last quarter.
We have prepared as said evade flat is that a five is the chairman to remarks slides eight true h. to add some color in detail.
Which.
Many of you seem to indicate were helpful.
So we're going to try to give you can find these remarks on our website and I'll begin with slide hi.
The.
[noise] yeah.
[laughter].
It's appropriate that we had some slots and type around here as.
Is because the second quarters of 2020, he's been much like that challenging and chaotic [laughter] ultimately we get to their results and the results for the second quarter were better than expected as we noted in slide Hi, The board now I'd like to thinking can.
Man the entire Matador came in the office and then the field for their continued strong execution and professionalism. Despite all the recent challenges of the novel.
I don't know bars, and the abrupt declining oil prices consistent with our updated plans for 2020 is provided in early March we reduced our operated drilling program from five rigs the three rigs during the second quarter and we continue to focus on capital discipline.
Operating cost control to further reduce our outspend as a result, despite the challenges in the chaos. It we faced in the second quarter of 2020, Matador delivered record high oil production along with record low unit operating expenses in drilling and completion.
Wallace per lateral foot, which should help us attain free cash flow by the ended the year.
We were hardened by these by these promising results.
To wrap the second quarter of 2020.
Capital efficiency operating cost control and the integration the number of our eight plus locations were key objectives. Our operations group. Once again led the way in this effort by achieving better than anticipated capital cost and operating expenses.
Our capital expenditures for drilling completing in equipping wells in the second quarter were 19 million less than our original estimates for the quarter and we estimate that 10 million. These savings were attributable to the improved operational.
And capital efficiencies and lower than expected drilling and completion cost.
Drilling and completion cost for all operated horizontal wells completed in turned to sales in the second quarter 2020.
The average age.
$881 per completed lateral foot.
An all time low for Matador is illustrated in slide B.
[noise] on the five right wells completed and turned to sales in the second quarter of 2020.
Oh two mile laterals.
We did even better average in drilling and completion costs between $750 and $850 per completed lateral foot.
Operating expenses in the second quarter 2020 were also at all time lows for Matador lease operating expenses on a unit of production basis declined to $3 of 92 cents per BLE in the second quarter, resulting primarily from our continued efforts.
To reduce cost and improve efficiencies in the field general and administrative expenses on unit of production basis were to 21 per be a we also an all time low for matador as the salary and other cost reductions voluntarily.
Implement they do that first quarter 2020, or more fully realized during the second quarter.
Of 2020.
During that further during the second quarter 2020, we achieved the second afford pordon production milestones, we said for Matador back in.
December this year.
When the five rice state wells in the eastern portion of the Rustler breaks asset area were turned to sales in may and in early June slightly earlier, and we had planned has recently reported.
In the separate press release, the 24 hour initial potential aggregate test results for the five race type wells were approximately 7600.
Barrels of oil per day, and 29.5 million cubic feet of gas per day.
As we all know 24 hour test can be Oh, a little erratic, but these wells.
We have continued to perform very well and I want to emphasize that Dave.
Led to better than expected.
Results.
After an average of about 55 days on production. These five wells have already produced an aggregate of 500000 via lease the six Rodney Robinson Wells also continued to exceed expedite X, but expectations, having already producing aggregate.
More than one point to be a lease in just over 100 days of production. The early outperformance of the Rodney Robinson race state wells in the second quarter 2020 contribute to Matador reporting record oil production in the quarter, even though 10.
15% of our potential production was shetty inner curtailed during the months in May and June.
Matador believes it has hundreds and more of these eight plus counter wells in its drilling inventory and building up these number of eight plus wells.
Is very important to our future is a major.
Currently and staff.
Looking to the third quarter, we are very excited by the outlook for Matador going forward as illustrated in slide F.
First we expect to achieve the third and fourth says I keep production milestones mentioned earlier for 2020 as we hit earlier projected in late July or August five leatherneck wells in the greater Stebbins area. All two mile laterals should be turned to sales then in September and earn.
The October we expect it turned to sales. The first 13 board swells also all two mile laterals in the Stateline asset area.
Second the same a tail to expansion in Ed Eddy County should also be completed in the third quarter of 2020, including the addition of an incremental 200 million cubic feet per day hubs is on natural gas processing capacity and the large diameter.
Toplines connecting the Stateline asset area and the greater Stebbins Ariad Samit tails Black River processing plant in Eddy County, New Mexico, covering 43 miles.
These projects reflect a vision planning execution in hard work that Matt Matador and San Mateo teams to achieve the goals Matador says as part of the Bureau of land management lease acquisition two years ago in terms of production and reserves growth.
Midstream expansion and improved capital efficiency and I want to emphasize that this has been a very active two years in planning these events and it's very encouraging and satisfied.
Say that these advanced are coming off as planned or better than planned.
Financially we were pleased with the recent upgrades by Moody's investors service to our corporate credit writing senior unsecured notes in writing outlook, we've continued to protect our balance sheet and liquidity.
While achieving these plans and ended the second quarter without staining bar borrowings that were 10 million lists.
Then anticipated in a leverage ratio.
2.5.
Just as we as expected and still well below our reserves based loan covenant of four times.
As shown in slide G.
We expect to generate free cash flow in the fourth quarter 2020, and we plan to use the excess cash to reduce debt.
Outstanding under our revolving credit facility. In addition, we continue to be pleased with the growth of our financial and operating results compared to our industry peers on slide eight.
The board the staff from that look back on the second quarter as yet another time, when we came together.
After.
Okay.
Executed on or on a revised operating plan.
And delivered strong results for our shareholders and bondholders in a very difficult operating environment.
We appreciate the support of our shareholders. During this time and we remain confident the outlook for Matador is very bright and we look for it normally be completing 2020 on though but also in the years they come.
So with that sort of back over to Valerie trying to take the questions on the line. Thank you.
Thank you, ladies and gentlemen late to ask a question for Star then one on cost Downs.
Ladies and gentlemen.
Thank you assets the army yourself into why Werent going on and one follow up all of them. We ask my reason the that's up to want to watch my one follow up until I have asked a question, Paul after which more low enough level funnier for.
One moment level.
Okay.
Our first question, that's all analysts RBC capital markets.
Yes.
Thanks.
Congratulations.
On second quarter.
Question.
Well, yes.
They came to add some regular rate bolstered they can you give us a sense, though Ben will assist dean ability of some of that and as you look forward to somebody with world and both moral longer lateral well overall, you know where do you think world ends up in both Boeing and that coming in that.
Yeah, Hey, Scott. Good morning. This is a this is David.
You know I think that I.
I think we're pretty optimistic about the board's wells I would point out that to you know we began drilling the gross wells.
Back in January so.
So some of the wells you know, we're we're certainly drilled prior to.
Prior to the.
You know the current a virus in the oil price decline and the and maybe some of the surface Costa declines that to that we anticipated, but certainly they've all been frac you know during a time when the completion costs were you know were particularly low so I think that.
I think that we're optimistic the wells a went well I know that to I know that to the operations team believes group but.
Actually a set a number of records for Medidur during that time in terms of portions of the wells drilled I know they drilled more faster than what we thought that they would I think in the.
In the last or in the current investor deck, where you've been highlighted the fact that are our drilling costs were a little below our expectations on those wells. So I think that we're you know I think that we're optimistic that.
You know that they'll come in pretty good I don't know that there will be quite where the re wells were the right wells with of course are in an area that in Rustler breaks that's a little shallower. These wells are a little deeper, but but nevertheless, I think we're you know we're optimistic that.
We're going to we're going to see some pretty good numbers on the CNC costs on those wells. That's got this is Matt just attack on what David said, there I think.
What the operations team did a really nice job of and not just a operations, but lan legal everybody getting ready for these longer laterals, we've talked in past quarters about the.
The additions that we moved to the rigs the the high torque high horsepower top drives a number of things that we worked with.
Patterson and getting those rigs ready for these longer laterals really come to fruition now. So you know we've just recently this is just one example that we recently we had a bottom hole Assembly run, which is one motor one bit one trip in the hole that we drilled over 12000 feet. So you know you're approaching two and a half miles a step forward. So I think.
So.
Reflective of the preparation that the team did in order to get ready for these longer laterals.
Hi, Scott one other thing because last year about this time in the fall conference.
That we went to we emphasize that Matador was in the midst of a capital efficiency change and the capital efficiency story and I think you saw it come out last year, while we boosted our number of wells that we were drill and more than a mile from.
29% to some like 83% and this is a continuation of that and that's one thing the Bureau of land management acquisition enable us to do to accelerate that and you're saying that dramatic drop in.
Cost per lateral foot and rise in productivity from being able to execute on that the Max calm room that we have here working with a combination of geologists and engineers going 24, seven is added to that efficiency and that.
Those cost reductions, while still improved in the wells by staying in zone will honker.
And ER and being able to drill further.
And quicker.
They knew where before so all this saves be working together glad for it to becoming a together and and I think you'll see that continue for the year ahead.
Okay, and just to clarify that goes on.
Target of $900 or what is that.
Good embedded number to think about going forward on the board on from future longer lateral longer I guess or you feel good good doing about good maybe at the moment number considering what you all of Us hill and selling them, but.
You know Scott I think I think we'll do better so.
I really do believe that to the to you know you're going to see has continued to a you know to deliver strong results with regard to our capital efficiency in dollars per lateral foot going forward. So I think I think for the rest of this year anyway 900 is sort of the the top end of things I think we'll do better.
Now Billy I don't want you to fill any pressure [laughter] Omar.
But we do Scott, we expect to do better maybe that does oil all of his hair color.
When price of oil goes out service costs are going to go up but for the foreseeable future I think Billy and his group and the Max calm group will continue to improve on that that's got were so good.
Sure.
We're really excited about to what we've got coming forward fourth I mean, once you get started drilling two mile laterals Bill and his team, we're going to get more and more efficient I mean, they they just started there are setting records Joe was talking about the Mexican route. So many other functions that team is working on are working on four can draw drag models. So prior to going into these wells they run a model.
So just to water torque and drag profile is going to look like and then we launched the that as we go long through that drilling process and make changes as we need to so I think all this is just a lot of preparation to get to the $900. So I think if you contemplate.
That's a mixture of service cost reductions in drilling efficiencies, obviously, the drilling efficiencies, we keep regardless of whatever the service prices. So the commodity price goes up to a foreigner actually this is probably more related to activity.
The rig count in the basin and in March was a little over 400 rigs. It's about 125 now and so we've got lots of room I think in the rig activity the where our service costs will stay there. In addition, we've kind of locked in a lot of those cost in fact on the completion side. It's 70, 80% of the completion cost are locked in for the remainder of year. So.
That's a good position, but even if commodity price goes up service costs go up or revenues award will maintain those efficiencies.
And Scott one other thing I'd, just like to to point out and I'm sure you're aware of it but.
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Most of the the shorter laterals in our program for 2020 or behind US now you know we achieved the 81 in the in the second quarter with a you know sort of like a mix of.
Sort of half two mile laterals and half less than two mile laterals with the exception of just two wells going forward now every well we turned in line, it's going to be a two mile lateral and I think the two mile laterals.
All had a little.
Little extra dose of capital efficiency and so given the fact that that's where most of the the turn in lines are going to be for the rest of the year.
That's why I think we're optimistic you're going to continue to see good numbers.
Got it think also that color that on a little bit more of this Billy Goodwin the.
You know, we're doing things a lot more efficiently out there we've got engineers out in the field now helping out with each part of the business that we moved out and that's helping us out a lot those guys are getting better right their hands on into too close to will the making improvements, but also a shout out to the service companies and vendors.
Contractors were working with because they're also getting better what they do get more efficient and proven technology, we just keep getting better and better so cost start coming up we're getting better all the way around us and the people working with an a shout out to Patterson their frac come the universal directional Emmis energy.
Okay, and Halliburton Schlumberger, all these companies have gotten better and better all the cross a drilling completion and production department to help us out you get everything better including are really.
Great I presume that's any color there.
The Apollo as you look forward.
And obviously a lot and also the federal permits.
Developed the state of mind areas as well.
It's analog Bridget.
Can you discuss.
Midstream.
The size of the the measurements Benson and is that.
Piece that you would actually developed this is the best did the midstream you'd be expanded that you continue to do.
Good afternoon.
The Atlantic area.
Just going to feed the midstream downstream.
Well Scott, it's David I think the to I think the midstream part is going on you know extremely well and you know we're.
As we noted in the release you know we're nearing a we're nearing completion.
Of the plant, there's a shiny new plant and Eddy County that belongs to San Antonio and it's a it's just it's getting very close to being ready to turn on and start testing and I think we're very optimistic as we said that by the latter part of August it's going to be ready to accept the new gas from the stebbins.
In the state line areas in particular with regard to state line. The large pipeline is a you know it's getting very close to being completed now and put together.
We're building out all the remaining infrastructure on the surface in the state line.
Area itself and that's all coming together, so I think we remain very optimistic that to.
That we've got to we certainly have all the.
All the permits we need for that too by the way I mean, you know all the permits the San Mateo needs to get to get all of that to wrapped up you know are.
Our in you know have been received and we're moving ahead. So I think we feel optimistic that things are going to come together.
As we thought it will be turn in those wells to sales in.
In September and October as we've laid out and and I think that you know that the new plant.
Gives us a.
No.
Quite a bit of runway then for the development of a state line. So you know as we continue to develop state line, we're going to have a we're going to have sufficient capacity with the midstream to be able to develop at the pace that we want to so I feel like to that's all moving ahead very well.
Scott one other thing here everybody listening NAND.
When the operators speaking and when you all are speaking there's been an echo and you're breaking up occasionally so we may have to ask for repeated the question.
We hope you're hearing our voices, okay, but you all are breaking up not third no fault of your own I'm just.
If we asked a repeat is for another easily let it be sure we under a stay in what you're asking.
No no I appreciate that are you heard the feedback from when the operator is talking there and so I understand but to your answers are going away I think your finger. Thank you Scott.
Thank you Sir our next question talking Gabe Daoud of Cowen Your line is open.
Hey, good morning, guys.
How big a door, hey, guys I was hoping to start where your liquidity position.
You look to the fall I guess, how do you think both the upstream and midstream credit facility.
I can change and I guess are you anticipating complete an increase to the San Mateo credit facility, just as you mentioned.
Back to the processing plant expansion starting up.
Well this is David how gave I'll start with that part of the question.
So I think that the.
That once the the merger between San Mateo, one and San Mateo too you know is complete and Thats getting pretty close now.
That.
That you know then the assets that were a part of San Mateo too you know will become party to the to the existing credit facility and you know once they do that will provide you know a lot of additional assets backing that facility and I think we're optimistic that the lenders then you know who were party to that for us.
So that he would you know what inning are to entertain and increase you know I mean, we probably a you know we've probably invested between Matador and San Mateo.
I mean that five point, probably somewhere between maybe 250 in $300 million an additional you know when additional assets that we built that are going to greatly contribute to an increase in a in cash flow going forward and so we feel like that the bank group with the would be open to.
I would be open to increasing the size of the.
But we do need to a you know to complete the merger agreement so that to those assets can flow into the you know into the San Mateo facility with regard to the reserve based barring agreement.
I think that we remain optimistic that to.
You know that will hold onto our borrowing base in the fall you know certainly.
Prices have come back nicely and I think that that will that will contribute to better decks being used by the by the bank group in the fall than than we're in the spring.
In addition, you know we've got a number of very exciting wells that are you know coming on and that will be in a PDP status by the time, we probably initiate the the fall borrowing base review and you know in talking with our bank group they've indicated that they certainly will take.
The initial results from those wells into consideration in the in looking at our borrowing base you know for the fall and I also expect it will probably be able to flip to a fair amount of additional proved undeveloped reserves are off of offer the results of those wells also so so I think.
We are you know we feel pretty optimistic.
Lot of it'll pay and of course as you know on on on but the bank price deck and where that is at the time, but given where things are currently I think we remained a we remain optimistic about the fall borrowing base.
Hey, This is Joe I, just have to little points I want to underscore died we gave a real good answer and add but two little points. It means something to me is one a wave one the first ones last year in February the undergo I read determination by the banks and we went through.
Unanimously they were 11 different banks credit Committee said approved it and 11 different reservoir groups that are approved it.
And we were.
Forming loan all the way down to $35.
Well they can for me.
And Santana as David said, we've added that more PD pay we've added more pads.
They've been very supportive led by RBC.
Very cooperative all of them have been.
Right to work with very professional and we're really proud of the bank group and the caliber added that we're not anticipating.
Any problems.
But we also don't want to taken for granted and have we're pleased with the.
Reductions.
And.
And in Jay and then they'll away and then our drilling cost, which improve our borrowing base numbers, but also want to give scotia credit on the midstream is that they've been working hand in hand with us through.
The midstream expansion and very appreciative.
Their work to add into.
And on the midstream size is that yes, with black and increase add that gives us some flexibility, but our real aim is to get ourselves in position to start reducing debt and being more free cash flow.
Great. Thanks, John Thanks, David This is one that's really helpful.
I guess just as a follow up just look all Ed to next year.
Keep the three rig cadence.
Given the significant cost reduction that you guys have highlighted how do you think capital try not to next year and then just alongside that Ari rigs will represent a maintenance type program or those that.
Wait too.
Oil production growth either either on an exit to exit basis or a year over year basis.
Well I think that I think if we maintain the three rigs throughout the year next year Gabe.
We still believe that we'll be able to to grow our production or maybe in the the.
No single digits, plus or minus 5%, let's say I think we we we continue to feel likes it will [laughter], we'll see that growth.
I think as we've as we commented before that that's on a year over year basis as far as exit to exit I.
I think that you know I think we can be close on the exit to exit I will say that to the fourth quarter of a of 2020, he is going to be a pretty.
Difficult comp to beat ER, and you know, it's going to be a goodwill and because of these wells that are about the couple alone it stebbins and particularly the Stateline and then the I think that.
You know the next group of Wells and state line the bodies on the Western side are due to really come on right at the beginning of the second quarter and so that's going to be it no that's going to be a very strong quarter. Two we feel like in 2021. So you know I think will be close on and on an exit to exit basis, but.
But we certainly will have a another very strong quarter in Q2, 2021, and overall I think we think that to that are our production should grow next year, even if we stay at the three rigs and you know with regard to two Capex I think we would expect to be.
You know probably in the.
The for 25 450 range on those on those three rigs some will depend you know before we get to a you know next year on the kind of mix of wells, we decide to drill but that feels pretty reasonable for me I'm sure there'll be some additional not that we would have and depending on what that is that could impact our key.
Capex, a little bit, but also our growth a little bit because what I'm talking about plus or minus 5% I'm really not considering much of it not program. So if we have a little bought up that's going to add to it you know as well and that might that might push the production up a little bit also and I think with San Mateo that we're you know can thinking of next year as being a bit.
More of a maintenance capex year, and if that's the case and I think that metaphors portion would probably be 15, maybe 20 million a and and so we actually as you know or looking for San Mateo to be a very positively free cash free cash flow next year and so I think.
When you consider you know the contribution to San Mateo to free cash flow you consider the incentive payments that we will have next year, because we will continue to get the San Mateo one incentives those will be earned will receive that 15 million in the first quarter of next year, but then as soon as a the body wells begin to be turned on.
All the same upto, two incentives the $1 million per well.
That we get through San Mateo too is all going to kick in and so that's going to also contributed I think we figure.
25, $30 million potentially of the incentive payments or you know next year on the you know on the San Mateo only five from five point and so we'll have those incentives will have free cash flow I think that the ERP program will be getting you know itself close to free cash flow, but in aggregate we feel.
Like that we can generate cash flow. If we're in a you know 40, low fortys kind of environment and to anything that's 45 or 50 will will be that much better. So I mean, I think that's directionally, how we're looking at it or you know don't get they'll be up too much if those numbers change a little bit appeared there when we finally come out with guidance, but.
I think that should give you a pretty good direction as to how we think things will go yeah and gay.
Just think that if you were at safety instead of 40, we make numbers work at 40, as we said we're doing it now, but ER abuse, we should be fortunate to for it to growth at 50.
At times, the 13 to 14 million barrels will produce that's an additional pattern 30, 140 million would change everything around and even half that would make a great different. So yeah. I think that outlook is is pretty good.
Going forward and we intend to make the most of it had three rigs and you know we plan to stay there for the foreseeable future.
They gave this medicine just a couple of points one of them BNP side, David is talking about with three rigs. We did see some single digit growth and capital efficiencies that go along with that I was I think the we'll continue to get better drilling. These wells, so you're going to get more Bang for your book and we're drilling these wells.
At a time, where we're drilling them as efficiently as we ever had and likely ever wheel. So that's a that's a good thing I think when prices do go back up like Joe said itself, we're going to be really glad that we drill these wells and then just on the San Mateo side.
You know once we get this expansion will.
We'll be at almost half of Bcf processing capacity there at the plant.
Were 335000 barrels disposal capacity so that.
Today, and so as we go forward once we get this expansion done we greatly expanded the footprint of San Mateo. So it's kinda talk to where the size of how we're when we want to add third party customers. We can go and get contracts in place that support those economics. So it's not like were and we never have done the building and they will come all but were.
Let me expand like Joe said, another 43 miles footprint in the basin. So.
Good position, saying too.
Great. Thanks, so much on for the color.
[music].
Thank you nice guy.
Well I am learn capital your line is okay.
My guess.
Yeah.
I was curious Joe I think you might just touched on in a minute ago in regard to the free cash flow.
That that you guys might think about.
Kind of balancing.
Spending level I'm wondering how important one guy you maintain positive free cash flow as we look into 2021 and beyond you know if there was a scenario where.
Returned to us. So good are you guys might think about adding activity level is staying free cash flow positive I guess on an overarching.
Being that you guys would love to.
Let me.
Well.
Jeff we.
You know where a public company with public shareholders, you know, we pay attention to them and if that's where the value creation is is to be great cash flow.
That leads to better evaluation, then you know we're going to be listening to that.
You know it we're not in a growth for growth site [laughter] as Matt Hairford likes to say, we're for profitable growth at a measured pace and we.
We hope Sunday together to three to four from three to four rigs, but we don't want to do it at a cost of evaluation or something that.
Exposes us to too much debt I think that.
We are always try to be in balance.
And we I think this situation now comes from.
Absent a very very compelling opportunity, we're going to work on reducing debt.
And now that that midstream is that made the capital. It's an important part of that free cash flow. The rock that were drilled in the and that's why we emphasize he's eight plus locations is strong enough to give us.
Gross.
Without.
Expanding beyond three rigs the capital efficiencies, we've achieved allows to get more fatigue and without.
Having to go to fourth rig so you know theres no hurry until I think you're in a stronger price and economic environment to to really give that.
The whole lot of thought and so what you're going to continue to see for US is to find these efficiencies to take advantage of the midstream position.
And keep your all in this good rock and we're adding eight plus locations.
All the time as an example down there and Walt.
We drill day, a third bone spring.
Carbonite that has added that.
Had double digit growth and they plus locations in air around it and we'll have more detail on that.
At our next conference call or through these conferences.
But.
You know we have always been.
I've been in the business 40 years, and we've always been.
No that that says they either have a strong balance sheet, but we saw an opportunity when we did the bureau of land management lease acquisition.
[music].
Change.
Take Matador stepped forward to where it had more capital of fish C.
Opportunities and make it a capital efficiency story and convert ourself from drilling.
29% longer and two mile laterals to 83.
Well that can they happened with Abbott also if we hadn't done that deal we would have missed out on 175 million.
And incentives and capital contributions from our.
Five point, our midstream partner so.
That was a step up for us in May this much more competitive and helped us grow to number eight into Mexico.
In the oil production so.
I think David has done a great job navigating through here and the technical team and give shout out to a grand Stetson and Tom for combining with David and coming up with these programs that not only save money, but still increase per.
Production, So we'll have a little growth.
But now so time day keep building up the balance sheet.
But not stopping in our our track so I think they've put together a good program, we're beginning to see the fruits of it and I think you'll have an even better report as we bring in no Stateline Wales.
And we'll be.
We'll be glad we did that at a time of low cost because these will become somewhat most profitable wells will ever drilled even though they were born.
At a time of low oil prices, but they're going to produce for long time, just like the Rodney Robinson.
Early days as produced over a million barrels of oil or gas equivalent.
But they're going to remain out there for years to calm just like the stateline and or other long term wells added to that's really why we like our chances.
Great I predict that Joe and my follow up.
On the a publication, so I'd kind of ramp I mean there.
Let's talk about the appetite that kind of any grow that brio coring up.
First areas extending laterals or maybe like that.
You talked about where you're finding areas that are much better.
We thought I guess just.
Generally wondering level on the water and level and guys baked in there.
Okay.
For that.
Well Hi, Jeff It's David Good morning.
Look I think we're we're certainly optimistic that you know that weekend that we can continue to grow that I think you kind of touched on some of the things that are important to be able to do that you know one I think is just part of the continuing a geologic effort that has always been a hallmark.
By the doors work in the Delaware Basin, I think even even in times like this we've tried to continue to a you know to support the teams the geoscience and the you know that asset teams in their recommendations to step out here and there and and tried to make a you know yet another.
Our target work the third bone spring was it was a case in point and we went ahead and did that in the and got a very very strong result from it I.
I think the the Wolfcamp b up in the the Stephens areas. Another case in point, you know, that's a pretty big step out relative to a any horizontal well that's been drilled in the wolfcamp b before but you know our teams that like the potential of that and so we decided to go ahead and include one of those in the this group of five seven.
Well you know that we drilled.
So that's a way that we'll continue to work on that and then on the land side you know our land group continues to do a very good job of helping us to block up or.
More of the.
More of our acreage.
I know that if you looked at a map between two years ago and today you know you would see much more block you Miss you know in terms of our key asset areas around rustler breaks around Stebbins, you know corestate like you know those kind of things that to you can definitely see you know that blocking this improving and that's.
A lot of good land work, that's trading with others, where we have things that you know make other operators work that they have stuff that makes US you know worked a little better from an operating side. It's a good it's a good thing to do if it's a good thing to put together and so we're continuing to work on those things and I think as a result, you know we're optimistic that we can we can make that number.
Gross.
Yeah. Just this is Matt in mid May want to weigh in here, but I think our tool kit is getting better and better as we go along as well. So we've got seismic over the majority of our assets and so the team is doing a nice job of identifying targets and staying more in target. So gets again back to the capital efficiency. The more we stay in target to better or wells.
I also think they're just and this is just kind of a general statement, but success leads to more success. So the more that we're able to to go out and identify which of these zones are working and making a plus locations gives us more confidence and then what we might try next and then I think.
Again getting back to the Mexican guys and just the overall operational efficiencies as you drive these costs now more and more wells moving into that a flawless location because as you know, it's a 15% road return it.
$30 oil so.
You know I think will that number will grow over time, even as we drill some of them up.
Net here group really has got a great job and I want to give you the opportunity to acknowledge it well I appreciate that you know as as Matt said, Matt and David said, we do you have a broadly increase tool kit between the seismic and Petrophysical work being done at Matador really is is leaps and bounds.
Beyond where it was a few years ago.
Those those tools really help us a identify the best targets and hopefully grow that eight plus a location count significantly. It also really helps on the execution to I mean, I know Max comments in mentioned several times here, but having the geologists and the engineers working side by side analyzing.
Every well that gets drilled relative to the seismic data relative to the Petro physics relative to the drilling performance really helps us go faster and saying that Iraq.
Great details I prayed for him, but I'm going to perfect.
Yes.
Thank you.
Question time frame out of Raymond James Your line.
Right.
Good morning, guys. Good morning Ball Hey, John.
As you continue to drilling completing these wells in quicker book are thinking like how do you managed under Basel obliging perspective, like it's a decision came to bring online.
For more wells planned persons like going up so docs sort of hard.
Kind of manage that bouncing out published Instagram problem they have to Paul.
Yes, Yeah, we were that's a great question then leave.
We've talked about it many times.
And it's a constant.
Deal that we're really proud of why they're drawing them faster and making.
All the wells more capital efficient.
And so it's hard to be really precise on the capital expenditures because not only is at a high class problem, there, if you're drawing them faster but.
He'd from blade and that Nancy spend some more money, but youve convert them to pay the piece. So overall you don't want to slow down on that you do want to take that into consideration as you do your budget and debt.
But this is a good time just to note that in the past our production has been lumpy at times as we brought wells on its going to be the same thing with cash flow in some respects as you do this pad.
Pad drilling, but overall it he dell.
Thank you.
I want to slow down here people from being more capital efficient and say go home for the month of December we've exhausted our budget.
[music].
You just try to leave yourself enough flexibility or cushion that.
You didn't take advantage of your groups being more capital efficient or picking up some non off or interest. That's good yeah, that's outstanding or picking up some interest in your wells from people.
Wanting to make trades or other activity and you just kinda.
I have to.
Manage it a little bit and leave yourself, a little bit a cushion and that's why the extra liquidity, we have with our banks is important because that allows us to adjust the timing. So it's more of a timing question John I think than anything else you don't want to turn down.
Or slow down year troops.
I'm doing that extra the good work.
And and not.
Yes.
When you have got like David you just put more pressure on him to make it all works out of town the cash today, well Hiload look.
I wanted just echo what you said I really think John that you know.
You know seemed like there might have been a little bit of concern that we didnt to reduce our capital expenditures you know estimates for the rest of the year and I think that to you know just what Joe said you know is very correct I mean, it for one thing we've still got five months to go with this year you know so we'll see we'll see how that goes I think we're on.
Optimistic it's going to go well and there'll be opportunities for us down the road you know to to reduce our numbers if it looks like it's going to come that way, but I do know that to you know I do think that what's going to happen is we will see that as the the group is you know drilling these wells a little faster.
There will probably be a few more you know.
Operated wells that gets Bud you know right at the ended the year that we hadn't counted on so that could add some additional drilling dollars. In addition, you know probably won't surprise you that we're seeing the non op side of things kind of you know beginning to pick up a little and so even though we took our you know a turn turn it.
One count down slightly.
What that what we're really seeing is that to some of our you know some of our Oh.
Operating partners that were in wells with have decided to go headed in the drilling you know in the latter part of the year on those wells, but deferred the completion into Ah you know into next year. So there's a couple of wells that we thought would be completed next year that were in our this year excuse me that were in our you know till count that we've kind of pushed.
Into next year, but we still expect to have you know those wells getting drill and in fact.
We expect that to we'll have two or three more wells you know that will be you know that may gets but on a dollar basis. So.
Maybe we Didnt to you know maybe didnt have a chance to get quite as clear on all that in the in the in the written release. So I. Appreciate your question you know to kind of allow us to expand upon that you know in the call. This morning.
No. That's that's very helpful. And then just my follow up question on the anchored trains that happened during the quarter, where those concentrated in any one specific operating area for you all.
No.
I would say no.
I would say that they are a they are pretty well diversified across.
Our our acreage portfolio.
And John there not just initiate buys for the other companies in the silver lining one silver lining or to this Kobe at 19 in there and that price war is that everybody is.
Crime to work on their capital efficiency and improve it.
And so there's a lot more cooperation on data and trades.
You know non off interest and alike are during times like this because everybody's trying to get better and there you know people are helping and.
ER and as you.
Cooperate and help it just gets better so that's that's made doing business a lot easier and tab.
You know we.
He you just find a lotta helpful is what I'm, saying is people.
Can be reached their returning calls because everybody knows that it's in everybody's interest to help each other improve their capital efficiency.
Thanks, a lot guys well done.
Thank you John Excite John.
Thank you. Our next question kind of my scale as my follow your rise Oklahoma.
Good morning, everybody.
Good morning good.
Good morning.
If oil prices were I mean are out there or any longer term.
Three rigs.
From a midstream perspective with the half a bcf a day of processing capacity.
Is it fair to think that the 15 to 20 million the San Mateo Capex, even mentioned for 2021.
He said well maintenance capex number or the midstream for next few years.
And I guess, if that is the case and that mentioned third party volumes or is.
Is there enough visibility there to fill the black River process My point.
Okay.
Hey, Mike It's David.
Ill start map may want to may want to chime in too but.
I would say with regard to.
You know is that a pretty good maintenance capex number for San Mateo I think that it is you know I think it's a pretty good maintenance number going forward.
I also think that to even even with the three rigs or you know we could always anticipated having a couple of rigs running at the state line. So as long as we have two rigs running up to state line or you know that has a big impact it doesn't really change a whole lot you know our outlook for for San Mateo clearly.
When we had six rigs in the program you know we would have had a little more drilling probably in the Rustler breaks area. For example, but to some of that drilling was going to be in ammo bridge. Some of that or you know drilling was gonna be elsewhere, which you know wouldn't have had as big an impact on on San Mateo anyway. So I think that the San Mateo volume growth you know.
Should continue to be good even as we run three rigs. In addition, you know bear in mind that that when we designed this 200 million today a plant expansion. We did so with the thought in mind that to over time, you know Matador would need pretty much all of that.
No additional capacity and so.
No I think that it's not going to be tomorrow or right away, but with the continued development of state line. We think that that capacity you know will be needed now I will say regarding the latter part of your question when you ask.
The 15 to 20 million include you know third party opportunities the answer to that is mostly no. It would include maybe some small you know ones here and there, but if we had any sort of a significant third party opportunity. What we've always said is that that would probably entails some additional capex, but.
We wouldn't enter into that kind of the deal unless we felt like it was a well supported by you know volume commitments acreage dedications, whatever we needed to make us feel very comfortable with the return on that capital and so that's the advantage that we have by having all that now is that a you know we can kind of play in that way so.
I think if we if we make it a bigger deal for a third party you know a bigger third party customer, which I hope that we're able to do it will entail some additional capex, but it will also be part of a very well thought out business decision.
Mark This is Matt David said, it well just restate one thing he said.
I would say immaterial to together the only volumes, we contemplated for economics were Matador volumes and so the the idea was matador is unique or tenant will make this expansion fly, but we will have third party opportunities on this greatly expanded footprint.
Also one of the things that we do have an advantage with Matador, having most of the reserve capacity and ends at the same upto two plant is if.
<unk> costs are running really their team are able to go out and find some third party volumes when it come on.
Sooner than later, we can bring them into the plant Matador Krueger temporary relief temporarily released some of the capacity to a third party. If it gets to the point, where we need to add another train say another 200 million. We would have the volumes again contracted before we would ever start construction on that so I think we're in a really good spot scale for for same too.
Great and I wanted to ask on the federal locations that are permitted assuming the permits and progress or approved crude before a new administration were to make any changes you have an estimate the percentage of your federal leasehold that you could potentially go.
Drill drill and also wondering about a expirations on those.
The federal permits performance.
Yeah, we could in the news release, a little information on that.
But basically is this is that we think it catches the them, saying you can't drill on your lease held are fairly slam because that probably.
Me it taking in form of Constitution, which you know there is eminent domain or whatever they do that they've got to pay for it and physically theres a permit there I think there again allow you to drilling the federal government, it's going to need the money so for leases already granted or permits are a.
Issued I don't see much of a problem and we put in the release that when we bring one it just one of those Bonnie leases on line and we will have HBP, 70% of our federal acreage and the rest is soon to follow in this next two year period, where do you have all year.
Permits that are they've been issue do you have two years to drill the wells. So don't see much risk there Ah, but the ethane that we've been trying to make no news that weve.
Matador drilling program has a lot of I plus wells that are not on federal.
Leases and we have explored the concept what do we do if we had a whole years drilling or two years drilling on now all in on federal leases. So you have no federal leases, what what our drilling program look like and that's.
The concept of AD in Atlanta that is already happening and you've got to fail have confidence in your your geoscience group that if that were to occur or still plenty of opportunities out there.
This is that you know bison 5000 feet thick.
Just like we're finding new zones, all the time when we came out here.
Yeah, the Eagle Ford I've spent almost my whole career at here there are two or three sounds that we're looking at and now we're producing from 17 or 18 different zones. So there's a lot of opportunity. One reason we were attracted to the federal leases at the time is our 87 and a half so the NAND is low.
Got better, but don't think they're going to go away for particularly.
The Lance.
Manny and their permits.
But added Keith to that are a lot of other.
Locations, we have on fade leases that are HBP and stake leases that are HVP, we say those continuing so.
Mike I think we're in pretty good shape, and we took that.
Into account and have taken into account and.
And.
<unk>.
I don't say much reason in new Mexico, the governor while a Democrat has been very supportive of the industry, which we appreciate and.
I think yeah.
They'll basin changes, but I think we're nimble enough to change with them and keep up the caliber of our drilling program.
Sounds good thank you Joe.
Thank you. Our next question Todd will now being rented Sarnia your line is okay.
A more Joe just quickly want to clean your team you guys. They put out an operation plan quarter ago, and you will certainly continue to get those targets that fulfill David that it. Okay. Just one that could that Joe do you see that you've done a great shopping and all those targets like my first question is really on salmon tail as David mentioned about that potentially coming online the additional like part of that coming.
Online in mind online buying talking the question to David Info or do you still as you bring it closer to some sort of sale transaction for his words quickly lower leverage or.
Maybe just talk about.
M&A consideration on Sendmail once that even rents higher right.
Nail I'll take it first and then David can bad cleanup.
And I'd just tell you. This is that we're a public company and we try to play a strike game. If you look at the 40 year history of Matador.
No we sell first Matador and then this matador Oh, we sell a good part based part of our Haynesville acreage to Chesapeake. We done we've sold you know our first midstream plant the enlink.
And we brought in a partner for half interest on this same a tail to and the San Mateo project. So you know we've always played a strike gain if an offer comes in with a bigger or smaller leaps held off pieces of our Eagle Ford on a case by case.
Basis, if it's a strong golfer we're gonna given strong consideration, we've always said that and sometimes yep properties Liz.
With Chesapeake hateful or Eagleford are out here that makes more sense for somebody else to have it. So we'd play is strike game or we're not out there with a for sale sign because we see a lot of benefits to happen to midstream program. This complimentary to our Asian, PE and we're working very well.
Matt Spicer and his group there there with upon when we're ready to bring them online we're not Larry.
It's a complimentary because that's a fee based business to our aid pay which isn't commodity base business. So.
We feel at this point they didn't enhances.
But we would consider.
But you know I'd tell the tire kickers their waste their time, they need to come and be serious in oil well listen.
But we also see had enhances so.
That's right we'd look at it up.
And everybody here has an opinion and why we make decisions is we really get together and hash it out it won't be something that I decide or David will be in the room and really talk about the pros and cons tried to be clinical and try to say what add some most value for our shareholders David.
I would just Oh, just sort of reminiscing, a little bit Jos I listen to your answer which I thought was great I was sitting here because Gregg krug is sitting across the table from me today, just by happenstance as he was probably seven years ago, explaining what he wanted to do or and I can remember thing.
You want to do what you know with regard to building midstream and and and now you know I look at him and Matt Spicer and you know James Meyer and all the people Matt Hairford all the people that Matador who've had such a.
You know a an impact on a vision to to bring San Mateo together and you know look at what it is now I mean, my goodness, a 335000 barrels a day of water disposal. You know 13 said to the art salt water disposal wells gas gathering all gathering water gathering you know you know.
A big water I mean, big oil transportation system, you know a big natural gas transportation system and almost half a billion a day of natural gas processing capability, you know Wow I don't even think Greg thought it was going to be that you know seven years ago. So I think that we're really very pro.
Our out of San Mateo and the business. So that's been and all the hard work that's going into two getting it to this point I'm. So excited for you know just the next six weeks of time to run off the plot. So that to so that we have all this stuff put together all these pops or just about to get screwed together to the plant.
Everything you know, it's kinda like five bones gonna connected the be boat and we're going to start run to get up and ER and I really just a im.
Sorry to be a little the you know old home, we here, but it's a it's kind of a cool time in something I think we're really excited about and so.
You know we might sell it someday, but ER.
No I must have right [laughter], well, he's saying, hey, and Neil you May remember that we really got serious about that they are building. The midstream when we were on our IPO roadshow back in 2012, and because weve getting all these questions about transportation processing and we weren't having problems.
That time, but it is clear others work and so gray spent a good friend of mine.
Matt and have worked here before they win third grade school together.
And Hooker, Oklahoma and.
Greg knows everything there is about.
About the gas businesses. He explained it we started giving it a try a little bit at a time. It just built up and now it's over a billion dollar business, it's only going to get more valuable as we bring.
This second plant on the line. So it's a it's a very exciting asset force and I think two Neil just one last little thought on it is a you know it's provided a lot of of operational control you know to Matador to its been a it's been really you know very entered.
Well to our ability to get wells on you know quickly and get things turned to sales more quickly you know meet our targets I mean, a it's a you know I think the coordination between the Matador teams the San Mateo teams. The planning I mean look from the the time, we put together the current plans with regard to how we were going to develop.
You know Stateline Stebbins and all this.
San Mateo was right alongside us in terms of of how they were going to put that together and our partner five point as well so I mean, it's a.
It's a very it's been very important part of our business.
Matt I was just an add one more thing here, maybe a couple of things that I think it's what are these two businesses work together I think is unique for us I mean, we we didnt put together a bunch of midstream assets, and then sell them to somebody or even I.
I mean, we started kind of crawl and before we walked in mcdavid. So no no we're running but we're to the point now were these two business was really do work together I mean from the operational efficiencies like David was talking about when you're putting on these 13 wells and state line you want to make sure that your midstream partner is gonna be there you want to make sure that they're going to do what they say, they're going to do and were certain.
I mean.
<unk> operates as an independent midstream company, but were the anchor tenant and we get a lot of attention from those guys and and they need the volume. So they it's been really nice gone from like do I can say in 2012 were 400 barrels a day now we're well over 40000 barrels the midstream same thing we went from.
Maybe moving a little gas in Eagle Ford to where we're at now so it's been a I'm us right up on both sides.
Well no definitely.
Don't close go ahead.
No go ahead, what are you gonna say, they always say definitely go sell those boats connected just what David said.
[laughter].
Yes. Thank you go at it has been an interesting and that's one had been one advantage of being public issues on the road you get these good questions. Why you can do this what's happening here and you hear about other challenges that it's made I think our business plan.
Sharper. So we appreciate your questions. We really appreciate your interest and it's got a lot of value that isn't fully recognize a in the marketing it's like our stateline and bodily Robson wells are really perform it and you know we released that on the Rodney.
Robinson first hundred days 1.2 million, they always and that this is good good rock and.
Teams are working together with the outlook is is good and neither area, but I want to emphasize whether it's painful or eagleford or a midstream projects. We're gonna do what's best for the shareholders as the it's been pointed out many times by you and others.
This management group has got a lot more skin in the game then virtually any other.
Public company, you know I'm, the largest single shareholder and most of the a senior grape own about five to 10 times, what their counterpart and other companies own so.
We're we're shareholders too and when Matt has his mother and mother-in-law involved.
There's an avid let's look if you could illiterate.
It gets tricky as Matt said that that [laughter]. My quick follow up just follow on that slide eight you talked a lot of definitely plus locations. What's notable in the will not only how much in various locations such as Ranger and Arrowhead, what Joe If you just kind of all the various formations or maybe based on this diversification.
Allow you to do much more.
Just more development mode going forward and potentially see even lower cost because that maybe just talk about the overall.
Plan, because this diversity or inventory base now.
Yes.
Well.
Hey, Neal, it's David again, I I think that.
I think what.
Where we have comfort is that a is that you know we have a lot of options and a lot of opportunities right. We're currently focused on it had been focused on you know the work we were doing it the state line at Robbie Robinson at Stebbins, you know there was a time two years ago. When we're more focused you know in on you know the rest of the bridge.
Next area, we probably will be again, you know there are parts of of Arrowhead Ranger that we've known for a long time, we're going to we're going to be.
You know good areas for us.
But we had that acreage up there tended to be more held by existing production and so there wasn't quite the same urgency to sort of work through that as there was some of our acreage that wasn't you know wasn't as held but I think we've known for a long time as I've said many times, we that area was sort of the bread basket for the bone spring and we.
Do we were going to have good second bone spring targets, all the way through their big back toward Melon wells will be drilled those a number of years ago. You know I think those wells are all getting close to you know 2 million barrels a day of reserves you know each and so you know there's been some there because there are some really you know great wells that can be drilled up in that.
You know that part of the basin.
We've also I think begin to demonstrate that the wolfcamp is going to work you know are up in that area too. So you know we're we're going to continue to you don't continue to work through the basin I just didn't comforted by the fact that I think that that we have lots of opportunities lots of good wells to go drill as we've often said, we don't think were an opportunity constrained.
The company in anyway. So.
And I wish we could be running six rigs today, because we'd have a we'd had plenty of good you know probably a good spots to put to put those rigs.
We did have plenty of good spots nail, but I couldn't take all the questions we might get [laughter] fixed rate couldn't have we're kinda painful correct.
So we're going to stay at three and talk about or opportunities.
Very good thanks, so much guys congrats.
Thanks Nailsea.
Our next question Tom on because they have I'm traveling a lot of Phil.
Hi, Thanks for taking my question.
Just looking at your bond prices, while I'm Gonna bond investors, so does the $75 hitting a 25% discount.
No.
And then you talked when do you into maybe buying back as you know steel capacity on the credit facility.
Even up to your Capex plans.
I think that this is David good morning I.
I think that to you know one thing that we've one thing we've sort of noticed or about to about how our bonds have traded through this period of time is that they seem to kind of move you know obviously, they moved down and then back up but the the moves have been a on fairly fairly limited vault.
And I I think that we.
Our uncertain as to whether that you know we could Ah if we initiated some sort of a buyback program that we would we would really be able to.
Bye.
Enough that would be of significance before it would.
Eventually just caused the price to you know to to pop back up further so but you know might be wrong on that but I also think that you know we feel like that to you know preserving liquidity has been important during this period of time and it just didn't feel like the best thing for us to do.
You know at the at the moment I suppose that could change, but but for now I don't think we have any immediate plans to to buy back any evolves.
Great and then the second question on leverage how do you think about the coil prices I mean at $40 oil.
What did things along with them levers target.
Well I think that a consistent with the way we can always run our business or you know we've always tried to have our leverage target two were below I mean, I think if you kind of looked back over the history of a you know of Matador, a really good didn't have much debt.
Until just before we went public in the than you know.
After we went public you know our debt to EBITDA was was traditionally below two I think the only time that it to that it got above two was back in 2016 when prices were were low again and it got to up towards three in a and then as prices improve the you know we were able to to bring it back down again and Oh.
And I I think we're optimistic that we'll see we'll see the same sort of thing here I mean, I don't we had projected of course that will go above three before that you ended the year, that's not where we would like to be and as Joe said, we're going to focus on you know trying to a you know pay down or debt and move our leverage back in the you know.
The other direction. So you know I would say long term.
That we would and the board would probably be you know comfortable with a you know with two or less obviously, the lower we can get it the better of course, but but I think that to you know that's that's where we would be the most comfortable Joe may want to weigh in on that too, but I think that.
Sort of the way we've always tried to run thing yeah, we want to lower the debt just as David said, we've always had a practice at being two or lower.
The difference being the Bureau of land management deal. The BLM deal that was a once a lifetime opportunity. If you didn't buy those leases and you weren't going to bomb in your life time years or mine them you might live a lot longer me certainly wouldn't be in my lifetime and those are 12, and a half and we've added.
So many I'm going to come up with a slide.
That shows that on the day, we did that deal we added hundreds of millions of dollars and pedal locations. It also set us up that if we hadn't done that deal we wouldn't have done San Mateo too, which brought in a 175 million into the company, a 50 million carry and the drilling incentives and as well as.
Some of the best wells or they're being drilled in the basin or by others or by the us. So that was a strategic deal that looks better and better.
Each month it goes along.
But we're not satisfied where we're going to be much more careful as we work it down to two more that is because of the price problem. The commodity price then the debt level, because what I said earlier, if you had a rise to $10 and I use that because it's easy to multiply.
Times, our production oil production next year 13, or 14 me and that's a $140 million you add that on and you are back down there in the two you know so we are looking that number of face to reduce debt of mineral deal. All those are on the table.
Anything that can help move that down there is gonna be on the table. So I. Appreciate your question and and once you know were bondholders to all the officers around here Besides being Soc owners, we got bonds. So our scans.
Completely and the Guy [laughter].
What I'd appreciate it thanks.
Thank you. Thank you.
[laughter].
Thank you ladies and gentlemen.
And then a portion of the morning conference call I turn the call back on demand for any closing remarks.
Okay I have three very quick break from ours first I want to extend T. All again, everybody out there listening come see us we'll be happy to meet with you in person give you a tour of the office. Let you made some of that team sees a mass calm Ryan any I think you'll see instantly you know how remarkable that.
Ryan is to work with our drillers and everybody else.
Now a year ago people thought can you even drill two mile laterals, So I think bill in them.
You know, we felt very confident and they have they gone out of the data that come and meet these people yourself there.
Very nasty the lack of his neighbors and they're very capable in their respective jobs. The second thanks, Thanks, Moody's for the upgrade.
In our credit writings and on a on our bonds.
We appreciate that and knowledge month, it that a they can clearly see things are getting better here and finally, the last group I haven't fully recognized or given the shout out to as our accounting group they got through the.
Getting through the audit at all it 10 kids they're out there there have had collected the accounts receivable their audit group is as made pay what within pay for itself and a lot of good work through the karma virus and they're the ones.
That have sometimes real death, as they got to me and come around that.
Quarter they'll be here on Saturday Sunday are doing whatever it takes and Raul. Thanks again for your leadership with that.
So with that that's all I have but say come if you got more questions come see us and we'll spend whatever time you need to get your questions answered and now you have a choice in these moments and we appreciate you choose to listen in to this conference call. Thanks, again Hope say you said.
Ladies and gentlemen, thank for your participation.
The program.
[music].