Q1 2021 Matador Resources Co Earnings Call
Good morning, ladies and gentlemen, and welcome to the first quarter 2021 Matador Resources Company earnings Conference call. My name is Sarah 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 Companys remarks.
As a reminder, this conference is being recorded for replay purposes, and the replay will be available on the company's web site through may 31st 2021 as discussed in the company's earnings press release issued yesterday I would now turn the call over to Mr. Max Smith capital markets coordinator for Matador. Mr. Smith, you May proceed.
Thank you Sarah.
To everyone and thank you for joining us for Matador as first quarter 2021 earnings conference call.
Some of the presenters today will reference certain non-GAAP financial measures regularly used by Matador resources in measuring the Companys financial performance.
Reconciliations of such non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP are contained 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 forecasts of future events based on information that is now available.
Actual results and future events could differ materially from those anticipated in such statements.
Additional information concerning factors that could cause actual results to 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 that you can find a slide presentation in connection with the first quarter of 2021 earnings release under the Investor Relations tab on our corporate website I would now like to turn the call over to Mr. Joe Foran, our chairman and CEO Joe.
Thank you Ben and good morning to everyone and thank you for participating in todays earnings conference call. We appreciate your time and interest in Matador very much.
I'm going to turn the call back to the operator in a moment to take your questions, but first I wanted to make a few quick points.
First as Youll notice that we have continued to make good progress on our leverage ratio and borrowings at the end of the fourth quarter. We were about 2.9 and today, we're at two five.
Second is the revenues are up obviously on commodity prices, but even more importantly, we've substantially reduced our cost.
Not from.
Hitting on our vendors.
Breaking them down so much as work to P M.
Which we greatly appreciate to make our operations more efficient.
And we've reduced our time on oil fracking.
Fracking efficiency.
And the effectiveness and we want to thank each of our vendors for why they've cooperated and work with us, but these cost has come down dramatically and as we all know when you have an extra dollar of revenue the royalty owner takes his share the government.
It takes there are severance tax sales and use tax and.
And the like and you're generally left with about 65% of every dollar but the cost side every dollar saved goes to the bottom line and we get to keep so that's a big part of the difference.
Finally, I'd like to stress that we've been through a lot in the past year.
And.
There's been a lot of challenges with the pandemic with the weather.
With prices.
And.
Working our way through that has been a total team effort everybody here at Matador has contributed all across it.
Beckham and you're likely to hear day here on gas in the field.
They loaded up groceries in that truck and trailer in a bedroom with him.
Net slipped in their trucks to keep the production.
On and came here have worked together to P.
Plan, the drilling schedule and.
To work on costs, together and and and the geology.
It keeps coming up with new zones. When we went out to the Delaware a few years ago from the Eagle Ford in May that our main area. We were based on it on three.
On three zones today, it's my understanding is Ned will probably speak up at some time on a question we are producing from 18 different.
The zones and think it will be over 20.
By the end of the year, so just great.
Same way on San Mateo.
On our production group was right to turn on the wells, the Pops, where they're waiting for them. So we werent, having to truck out the old or the water.
Or all of it including the gas we're on path, which was good for ESG as well as the bottom line. So with that let me turn the call back to the operator for any questions that you may have.
Okay.
Thank you.
Ask a question you will need to press Star then one on your telephone to withdraw your question. Please press the pound key.
Ladies and gentlemen, due to time constraints, we ask that you. Please limit yourself to one question and one follow up.
So if you please limit yourself to one question and one follow up until all have had the chance to ask a question after which we will welcome questions from me.
Our first question is from Scott Hanold with RBC capital markets. Your line is now open.
Thank you congratulations on the strong quarter, it's good to see that our the leverage reduction coming quicker than expected.
My my.
Yeah. My first question is on some of the recent well performance and cost performance of these longer lateral on federal wells can you give us some color you know on on what to expect from them. It seems like the boros wells came on in and are holding in there pretty good I know the Bonnie wells, obviously, you have the longer laterals can you.
Give us a sense of like what the expectations are for those things are they holding in a little bit better based on on well.
Well management and then along with that you know maybe some color on the cost side, because I know you all tried some similar fracs on some of these wells have some seen some pretty dramatic cost reduction and in the plan going forward is that something you can replicate or plan to replicate on future drilling.
Yeah. Good morning, Scott. This is a this is David Oh.
Take the production side of the question or the well performance side, and then I'll ask Matt to step in and talk a little bit about the cough sudden the fracs.
Look I think we're I think we're extremely pleased with the wells that we've drilled it to it I mean, frankly, all over the base on but Rodney Robinson in Stateline.
As had been some exceptional wells are you are correct. The boros wells have continued to has continued to be very strong.
You know we had about a <unk>.
So I recall about 6 million would be are we you know increase.
The increase in our reserves this past year attributable to.
Just you know Reeves.
Revisions upward.
A lot of that was due to some of the boros wells as well as the Rodney use it others have continued to do well you know.
I think the when we put them all shareholder letter out the first of the quarter. We talked about how are those 13 wells had made something like a $3 8 million be are we already in the first six months of production. So they're they're hanging in there very well I think you know the Bonnie wells are off to a very very good start so very pleased.
With those.
We're so we're anticipating that that those wells will be you know probably actually even a little better than the boros wells I think that you don't always see the although the P. Sir.
<unk> you know, it's those wells, we'll we'll see the little kick from the longer laterals as we get more history on these wells and you know my prediction would be that we will see a you know we'll see the.
Proportionate increase in the in the U R going forward so.
All good right now so Matt you want to talk about the costs you Scott and good morning.
We're really excited about the drilling and completion cost in most excited probably bet the efficiency related to both so just to kind of.
Flow background on this we've now drilled over 75 with these two mile laterals. So you know we are getting better as we go and kind of what I'd like to point to Scott.
We just look back at the first round of boral soils that we drilled.
In the summer of last year, we spent about $800 per completed lateral foot on that these Bonnie wells were 16, and so you know that's 20% to 25% better well just on the cost and I will say one most important thing to US is that we don't sacrifice inequality in doing that and we have you know IMAX com team.
Just to hit it out of the park, they're up too well.
Earlier. This morning, I thought it was 116 drilling records ability just tells me right before the call. It 217.
So we calculate thats, probably a $15 million cost savings related just to Max com and they're staying in zone, well over 90, and 95 per cent of the time and I'll just point to well, it's not the first boards or the Bonnie will Scott it for one of the later Boros wells that we just finished the wolfcamp b well.
Previous record on the Boral was about 31 days when you guys did at about 16 and a half so that's 14 and a half days that they say.
And you know as we said in the past if you contemplate that being $100000 per day, that's about $1.4 million in savings. So we continue to knock it out of the park on the drilling side and.
And on the completion side.
You know, we've improved our efficiency there and.
Let's say 2018, we were completing about 900 feet per day.
This year, we're averaging 550 feet per day, and we just finished a couple of Stephens oil or tip off wells up there and we averaged 2200 65 feet per day. So that helps us from a couple of different ways number one service company realized is that theyre going to get to pump more frac stages per day, and so they adjust that into.
Their cost and they were paying less for wellhead equipment trailers supervision on all of the daily rental items, we have out there so.
And then Glenn and his team come in and they modified their flowback procedures, where we're using less equipment and saving several hundred thousand dollars. So just all in all just a great team effort and we would anticipate that we'll just keep drilling them faster and completing them better.
Yeah, Matt could you give a little color on the on the simulcast <unk> is you know how that went and if its applicable on on doing that going forward.
Yeah sure Scott you know, it's a really good tool for a four well pad, which we have probably 60% of the remaining pads for the year will be four well pads are first experience, we anticipated that we would save about $220000 per well, we actually calculate we're saving about 250000 so.
We're off to a good start we averaged around 2200 feet per day with Simon.
So for the first crack out of the box I think it's a it's a home run there and we'll be looking to to improve as we go forward.
I guess, what satellite 750 stages, there on the bond and use it with kind of without a hitch yeah between the borrow from us on an 850 state yes, that's all.
That's a lot of Frac work.
Yeah, that's that's pretty impressive and in my follow up and I guess, Joe you. You you kind of led me into my question and maybe we can hear from net but you know.
Obviously, you know 18 zones potential of 20 and it feels like this is kind of a question that comes up about once a year like strategically as you go forward.
How should we think about like what what zones are you finding they're gonna be most strongly.
Strongly economic and should we start to think about you guys. You know as you start looking into 2022 to really refining targeting some of the better better zones.
First or how do you see that development strategy going forward.
Yeah, Scott I'm going to say this first part and then let Ned.
Really get more specific but overall our guidance is still that per.
Profitable growth at a measured pace and while there's an abundance of zones to go after when we put play of rigs. The first key is you know mad doors went from.
Time, we went public down there.
I bought another 150.
So one of the 20 approximately.
Largest E&P companies by market cap and so we're more of a tortoise than a hair, but we like that moving at a measured pace and staying profitable.
Many thanks to the geological growth at a net has helped build it keep coming up with good ideas and we've been able to squeeze in testing those zones as we drill these multitude of wells to kind of.
To stay fresh.
And just.
Just give enormous credit to that to the asset teams into net for timber ideas in and being confident enough to test them out and it's worked out pretty well at net and many thanks to you and to the asset managers that team leads it we have four.
Affirming your ideas go ahead net banking, Joe and it really is a full team effort here I mean, it starts with the land and legal growth kind of getting the units put together and then the geoscience team on that.
And that the engineers.
Working together to identify these targets, but you.
Really what how we've done this in a lot of ways is focusing on what has worked in and a lot of our early assets you know the X and Y Sands, we started out with those and Wolf and push those to Rustler breaks and then.
Hats off to try and get one and his team for pushing those up into end of that.
<unk> asset area with great success. So one of the zones that we really like right now has been the first bone.
The rea well in an animal or I'm, sorry in Rustler breaks is kind of flying under the radar right now but that's.
A great well and you know you'll see us continue to push that zone around the base and buy.
There's a there's a lot a lot left to do in this space and I think just letting the rocks speak for themselves and kind of keeping an open mind to what we cashed in and add you know how we look at things around the base I mean, it's been a really a winning approach for us so you'll you'll see us keep doing that.
That's good color I appreciate it.
Well, thank you Scott.
Our next question is from Neal Dingmann of Truth Securities. Your line is open.
Thanks for the time, Joe My first question Middle for you or David you guys. Obviously are doing a great job of hitting your leverage goal is probably even ahead of you know what I think a lot of us were thinking now and I'm, just wondering where you all consider I'm wondering you know, let's say once you get to that two times, which I think is very possible and likely this year.
Would you all consider at that point, maybe a more robust shareholder return would you prefer even continue to pay down the debt with perhaps the lion's share or would you consider maybe external and internal growth just wondering sort of plans. If you do hit that target as I think ahead of schedule on nice job on that by the way.
Pat nailed candidly, we're going to consider all three of those alternatives and that's one of the things that we're hoping that they COVID-19 will.
As itself. So we can get back on the road and meet with our shareholders in person.
And hear from them, what they think and as well as meet with you the analyst.
It may come by and wanted to get together, where we can discuss and hearing your thoughts look at what some of the other companies are doing.
And <unk>.
Consider all three of those are.
And parts of all three of those so you might not have concentration on one you may have some of of a debt reduction and and some of them are raising the dividend, but look we just paid our first ever yes.
[laughter] give us a little break that was just I heard is value.
I was waiting for the next bill.
[laughter].
Yeah.
And yet.
The data is going to be a continuing day or to reduce and tab.
And as far as you know, we're not in any big rush too.
Add rigs or anything it's got to make sense profitable sales and that's why we've always tried to work is does it really add value. So it's not growth for growth's sake, it's quality growth and.
And a lot of efforts put around here to say where does is take it so.
You know, it's a high class problem to have to look at those three but it's really nice to have the flexibility that we can do any of the three or any part of that's free and still raise the value of Matador cell.
And San Mateo I don't want to San Mateo left out because.
They've not only contributed a.
To the EBITDA to the cash flow.
But the operational advantages that we've had.
In our gas word card on the Rodney Robinson or the the bullish wells are.
If it was an outside.
Midstream cabinet day, not not have been as responsive.
And be there waiting for us when Chris and class.
Had those completed those wells and they had I'm afraid to turn on so.
<unk>.
We're really glad that.
Greg joined us in mass faster jaundice, and they've really pushed the midstream ahead, and Matt Hereford and James and so it's all integral and.
One hand is really help wash the other.
Yeah, Joe just I just want to add to that just specifically on the Tripoli pipeline, which is what we call. The the gas trunk line that runs from the Black River plant there in Rustler breaks area on a state law.
We had with permitting and process and a lot of that was B O M and a lot of the state a lot of it was C and COVID-19 happened and people who quit coming to work in.
Almost certain that Oh.
The San Mateo folks.
Got it done when a lot of people wouldn't have I mean, they they went above and beyond the climb mountains to get people to come to work and improve permits and we put two crews to work with you.
Got it done and you've Gotta doing just in time, otherwise I think we would have been sitting there for for weeks, if not months with wells drilled and completed and waiting to produce so you know it was a herculean effort by the same sales team.
Yeah, no what it was.
Great, Matt and Joe you're interested to hear your perspective on all three magic really love to hear your opinion, given you guys have such a big holders on my last question is just on on drilled inventory in broader terms. How you guys think about tier one locations left in key areas like Stateline Rustler breaks and others. Thank you guys.
Neil and also it's true that we are big owners and that has a definite influence.
With our stock ownership, we make a lot more from the stock going up when I say, we the whole exactly group, especially Matt and David and Billy and.
At us by the stock going up a dollar or is it really do from our our salary compensation.
Bob.
And that's an important part of our culture, we expect.
You know the other staff to be.
Uh huh.
To be buying staff stock and being interested in that and were placed during the worst times of last year when the price war in the pandemic we're going.
And on our stock was challenged more we had over 200 of the staff get out there and buy stock during that time.
And I think the interest is paid off this year.
And yeah, and then the second.
Part of your.
Tell me that again, I guess sales and trading inventory the inventory is David.
I got so interested in talking about price.
[laughter] I'm glad you're here.
Yeah.
Yeah.
So the inventory looks really good I mean, one thing that has helped it has all of those different zones at net talked about but.
<unk>.
Blades, we have.
Or more eight plus locations and that's what a lot of this business has come down to as Hemi I plus locations and we define that is a it's kind of day did now but that was what would give you a 15 per cent right of return of $35 a barrel well we're above that.
And but we really have the added to those locations or redone then the numbers on it but we've got plenty of locations.
We drilled last year.
<unk> 49, 48 wells, so let's call it 50.
We we think we've still got a 20 year inventory on.
On a plus locations, but one of our shareholders really <unk>.
<unk> SaaS and our meetings why that's why we say, we like getting out and talking to and.
And he put his finger right on it.
In today's world.
Of those eight plus locations that you got.
And.
And if you don't have plenty for years ahead, you're giving them struggle at some time. So we're trying to stay ahead of that.
The drilling curve on that and touch wood.
It's you know it's working right now.
But we're confident that we're building the depth of staff.
Keep that go on and we like our chances.
Yeah.
Thanks, guys Great answer Joe.
Thanks Neil.
Yeah.
Thank you.
Our next question comes from the line of John Freeman of Raymond James Your line is now open.
Good morning, guys.
Hey, John Zone.
Congrats on another great quarter.
Just following up on us on Scott.
My question is on the cost side.
I guess this is a little bit of a loaded question, but it just looks like you are you are so far ahead of the gain here obviously on the Capex came in at 11% below your expectations. This quarter, you've already had 40% on your wells for the year.
That would've been turned to sales maybe on 657 on site.
So when I look at the original guidance of 734.
Yeah.
It looks like on those remaining wells that you all have on a year.
You'd be expecting them to be up about 20% on a per foot basis, and I realized you all I'd add some 10% service cost inflation on the back half of the year. So that explains some of it but just if there's if there is anything else day.
How we should think about.
In terms of what goes on to those those cost assumptions. It just looks like you all are just doing a phenomenal job on yeah.
On <unk> side, and maybe it's just as simple as you all want to wait for another there was initial Ah.
For greater Stebbins, well this summer to come on line and then maybe you evaluate where you are at that point on the on the.
Capex trends, but just anything on on that front. Please.
Yeah, John This is Matt I'll.
I'll answer part of the question I'm sure day will have some comments too.
You're right, we do assume that the 10% increase in costs in and we're starting to see a little bit of that.
Probably the the biggest thing to talk about would be the cost to saying you know regional sand and we're borrowing from the mines there in Texas and we've seen a pretty good jump up to 40% in the price of the saying on I think there's two components to that number one is just kind of the supply and demand on the rig count went down in the mines kind of reduced.
Their production. So I think they have the capability to increase that can probably help with some there and they probably will at some point in time.
There is the cost to get that Sandra location, which is strictly related to fuel prices.
Consequently, the price of crude is up and so diesel is up and that's not necessarily a bad thing for us.
We also think that.
You know just on the horsepower side of things.
The pressure pumping folks are probably going to be looking for some sort of increase in the future flow, we've kind of built that into book.
To your point too about the the wells up in the Stebbins area and Ranger Arrowhead areas. Those wells a lot of those will require an extra string of casing due to the total.
Aquifer up there so those wells or inherently a little more expensive to drill the ones that we've drilled so far are actually have been under what we budgeted. So we're doing well there but that would account for some of the discrepancy in the costs that you are looking at.
Yeah, I think John This is David you know a number of those wells you know on new pads to you know sort of their costs are going to be a little bit higher in the and you know we do.
I do think it's just a little early in the year. Two you know two to jump out there very happy with the very happy with how the cost came in in the first quarter, but even some of that you know we will probably push into the second quarter. Because we did have some you know some timing.
Issues, there to not so much on our side, but some of the non op stuff was a little little slower than we predicted in the first quarter. So you know we just we looked at it we're very pleased where we are and think things are looking good but to also think that we've got the range paying pretty well for right now and you know probably need another quarter to look at it before we <unk>.
Or making any kind of changes.
John This is Matt again, I just want to clarify one thing I said on a 40% increase in the profit cost and.
Ends up being about six or seven per cent of the completion costs and things that.
I don't know two or 3% of it if he calls so it's not terribly impactful.
That's really helpful on that maybe just my follow up David on what what you kind of start to mention on the on the non op side, maybe coming a little bit slower.
That was on the other products going to ask about was this.
Given the pricing seen in the commodity if you're if you were seeing anything on the non op side.
Cause you all to think that you know, possibly there might be some upward bias on the original non op wells that you all on sort of planned in the budget against seven net wells planned in the budget. If youre just seeing anything on that front, even though some of that activity side or maybe how the costs were sort of trending on that the non op side.
You know right now John I don't know that we think we're going to have a lot of you know additional additional amount out for the year. So.
You know there was just a there were a few wells.
You know four or five or so in the first quarter that I think we thought would get completed and turned to sales that are that the partner for some reason you know just didn't quite get there, but we know those are being completed we know theyre going to come on and so.
I think it's in terms of the total amount of activity.
Maybe maybe seen a tiny uptick but not too much but so I think right now we feel pretty good about you know where that where that number is it just a like I said just a few of them kind of slid you know slipped back a little bit, but I still think we expect to see that and you know on the cost side I think that the the cost seem to still be coming in.
The app are better than what we were anticipating so so that helped a little bit too in the first quarter.
I appreciate it thanks guys.
Hi, John.
Thank you.
As a reminder to ask a question you will need to press Star then one on your telephone.
Our next question comes on the line of day doubt with Cowen. Your line is now open.
Yeah.
Maybe just starting with the permitting process, obviously, it's resumed since.
The moratorium and it looks like you received another nine since the last update could you just maybe you said some color on how the process has changed if at all for you.
Elongated a bit or if it's still relatively business as usual.
Yeah, Hi, Gabe it's David.
Well as we reported you know since the day pause was lifted about a month ago now the authority has returned to the local office in this case Carlsbad for US you know to two approved permits in sundries and day rights away on the life and.
And so where we're pleased to see that that we've gotten on new permits you know through the kind of over the go on and through the system and the staff has been very cooperative you know to.
Get a number of sundries that are you know that we needed to support you know ongoing wells. We were drilling. So I think that are you know I think we're I think we're optimistic and pleased to see things opening back up a little bit I do think it's a you know we're still cautious you know just sort of see if theres going to be a little more friction in the system.
You know going forward and the and how that may impact things going forward, but but certainly you know it was a encouraging news to you know to see that new permits come across on to think we're optimistic that we'll continue to get them, but but we're still we're still cautious we're still watching to see you know I don't know.
We can say the processes fully return to normal as yet, but the but hopefully they'll moving that direction.
Gotcha Gotcha. Thanks, David.
And then maybe just a follow up.
Hitting on activity levels moving forward, obviously, you added the fourth rig in March.
Could you David or even Joe I guess, just help us think about the correct pace for Matador moving throughout 'twenty, one and into 'twenty, two I know you'll be drilling through significant a portion of the higher working interest inventory. So just trying to get a sense of.
You if you would need to add an additional rig to kind of backfill on.
The loss of those are high working interest locations. Thanks, guys.
Well.
I'll try David and then use yes, that'd be bat cleanup.
But gabe the that's it.
Multiple variable top question about literally not add another ray there's no.
It plans to do so we're going to watch how costs come in we're going to watch how the revenues come in.
We're going to watch how the opportunities come in and we're going to watch how the the federals.
And it's on on their pace of.
Proven permits and sundries and the like and there's all those things go into that and we just got the rig 30 days ago. So.
We got to see how that might work out.
But that's one reason why we replaced we've already been through our loans.
Commodities on our bank loan so we.
We have plenty of cash flow right now, but that's the advantage of having a line of credit and I'm real pleased that we have 13 member banks and are a credit growth and then unanimously approved our loan as it were no changes and so we've got their full confidence.
But right now we plan to take that.
The plan as we have it.
And let a little time more time go by before making changes it's the right pace.
Right now we could ramp it up but we want to also get the debt down. So that's our first priority and then the second one is paying the dividend and the third is working on they have growth, we got great opportunity set so.
You know, we can afford to be patient.
Patient most of our federal acreage is now H P. P. I think something like 78 per cent.
So that.
That becomes optional after that and the rest of the federal acreage for the most part overwhelmingly is eight years to run so that's a lot of option time and and we can.
You know, we can look at different strategies.
But we think we have good cards to play David I think the only thing I would add Joe just to just to clarify you know your question about the high working interest Gabe you know you know it is true that as are we.
You don't get get closer to you know drilling the locations are finishing up drilling on statewide or Rodney Robinson.
Those are some of the higher working interest wells that we're drilling currently but we still got a good ways to go you know it'll be it'll probably be the the into next year you know, perhaps before we've been making many changes certainly late in the year. So we you know it's going to take us a while even to work through those locations and should as Joe said, we decided to.
If you go back off on some of those and moved to some other areas I think that you know it's it before whats youre talking about kind of kicks in you know in terms of maintaining the same level, even if capital intensity, we're still we're still a ways from that happening.
Understood. Thanks for clarifying that guys and good quarter.
Hey, Thanks, guys.
Thank you. Our last question is from Gail Nicholson of Stephens. Your line is now open.
Good morning.
Quarter set a record for first quarter low. Despite Dorman February can you talk about what drove the low performance in the quarter and what was the impact on the LD.
From the storm.
Sure Gail this is Matt and you know I think you answered your question his effort.
You know our guys every summer we started getting ready in July and August, which sounds kind of weird. When it's 105 degrees that you start preparing for winter, but what we do.
And that's not only on the Matador your piece of it that's also San Mateo for the saltwater gathering in or.
Or salt water getting exposed on the oil transportation in gas processing and gathering so it starts early on.
And so that helps a little bit, but I think just driving costs down you know Glenn and his team they've got 98 per cent of the water that we produce is on path to get 78 per cent of the oil that we produce is on pause. So that all helps from a cost perspective, just getting out in front of things in and making things work on this winter.
Storm Yuri.
You know we took a different approach than I think a lot of other operators did our Argos and Joseph just before they went to the grocery store and in fact, a bunch of groceries and they've gotten their trucks and the one thing I'll disagree with them as they slept on their trucks, but I don't think they slip a whole lot [laughter]. They they were out there working on and they were in constant communication with the San Mateo folks were doing the same.
They're all making this gas plant run and then you know our marketing team here in Dallas.
Found a home for them.
Just to fill the gas unit.
He led the markets to make sure that we retain a minute.
But it's market specific.
Yeah.
That was the sound of that Gail with me.
Yeah.
[laughter] they were able to watch the market share that they've got on.
Elimination dried and got our products sold so two effort for the team on what I've been saying Gail. It's you know the best first quarter, we've ever had with the worst weather conditions, we've ever had so I think.
Hats off to the entire team.
Great and then on the AMETEK.
Generating free cash flow, we should see EBITDA growth throughout 'twenty. One can you just talk about what are the growth drivers for San Mateo in 'twenty two forward and then what is the plan.
Regarding the future repayment on its credit facility.
Well the I think the key growth drivers for our San Mateo going forward I'd say are our two specific ones number one are.
The growth in in Matador volumes in both the Stateline and Stebbins area is expected to be a significant over the next over the next couple of years 'twenty, one and 'twenty, two and that certainly will will drive higher volumes and higher revenues and cash flows for for San Mateo and also.
You know, we have a continuing and ongoing effort to to increase third party volumes at at San Mateo and I expect it to we will continue to add third parties as well. So I would say those are the two primary drivers I think I'd also just throw in the fact that I think those guys have also done the same to tag team a very nice job of of.
Reducing operating cost you know over the last several quarters and.
That's also contributed to a.
Better a better free cash flow from San Mateo. So I think I think all that's good you know with regard to the to the San Mateo credit facility.
You know, we did repay 19 million in the since April the first so that to pay debt down a little bit.
I don't think at the moment, where.
Whereas concerns you know with the with rapidly repaying. The you know the the credit facility. There I think what we're more focused on is given.
You know the merger of San Mateo, two went to San Mateo, one and the additional collateral.
Our looking to.
You know looking to sort of expand you know the credit facility and Oh.
That's probably something that will take on as a it's.
The objective here pretty quickly you know Gail and and maybe look to have a little bit to a little bit.
Better commitment.
In terms of our elected commitment and to just improve the size of the of the AR facility in the event that we need that going forward.
Great. Thank you so much great quarter guys.
Hey, Thanks Gail.
Thank you ladies and gentlemen, this ends the Q&A portion of this morning's conference call I'd like to turn the call over to management for any closing remarks.
Thank you Sir.
Really I thought Chelsea is good on the on the.
Questions in and we appreciate the stepson tape nature of the questions and we appreciate your you know follow on us and we are.
I feel very optimistic glad to see the whole.
The whole staff top to bottom contributing.
To the effort and in a material way and we like the innovation.
We didn't get into that but there are some there've been some great innovation stand.
On the tank car side, the rig design that Billy and his group came up with is paid off and the I'd note that.
By way of substance on that the fourth rig was state of the art rigs at the other ones were and is already off to a real good start so.
That has worked well and the same thing on the fracking the gas come up with new fracking techniques and and the plants are running well sell.
Sure as I say that something will happen this afternoon, but.
Everything is working.
And it's been a great effort by the staff to work through these challenges and we feel we've come out of that challenge is much stronger than when we went in and it's.
A year ago.
Almost exactly our stock had fallen down to one and then this time was about a three and nobody quit nobody despaired way.
They just kept moving through and it's rallied and and I.
A lot of debt.
I get that the bank approval, we appreciate them standard with this because last year. They renewed it no changes the 13 different credit committees in 13 different reservoir groups and they did it again this spring so.
Shareholder group everybody, we just want everybody to know how much we appreciate it.
And we say the outlook is very strong and I think that'll just generate more opportunities for us.
So where we'll sign off and once again invite any of you to come see us is as the nation opens up again.
We'd love to have you come by and meet more of our staff and have a longer visit and I guess, particularly on June 4th at the annual shareholders meeting. Good. That's it. Thank you day fit for kicking me under the table with me here are that.
Yes, we had the annual meeting June four we stand at the annual report and we really hope you'll come in we'll get back to normal again, so thanks, a lot come see us.
Ladies and gentlemen, thank you for your participation today.
The program you may now disconnect.
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