Q3 2023 Matador Resources Co Earnings Call
Yeah.
Speaker 1: transcript
Speaker 1: Good morning, ladies and gentlemen. Welcome to the third quarter, 2023 Matador Resources Company Earnings Conference call. My name is Lateef, and I'll be serving as the operator for today. At this time, all participants are in a listen-only mode. We will facilitate a question and answer session at the end of the company's remarks.
Good morning, ladies and gentlemen, welcome to the third quarter 'twenty twenty-three Matador Resources Company earnings Conference call.
My name is cheap and I will I'll be serving as the operator for today.
At this time all participants are in a listen only mode. We will facilitate a question and answer session at the end of the company's remarks.
Speaker 1: transcript
Speaker 1: As a reminder, this conference is being recorded for replay purposes, and the replay will be available on the company's website for one year, as discussed in the company's earnings press release issued yesterday.
As a reminder, this conference is being recorded for replay purposes, and the replay will be available on the company's website for one year as discussed in the company's earnings press release issued yesterday.
Speaker 1: transcript
Speaker 1: I will now turn the call over to Mr. Max Smith, vice president and best relations for Matador. Mr. Smith, you may proceed.
I will now turn the call over to Mr. Mac Schmitz, Vice President Investor Relations for Matador. Mr. Smith, you May proceed.
Mr. Smith's your line is open Sir.
Speaker 2: transcript
Thank you Latif and good morning, everyone and thank you for joining us for Matadors third quarter 2023 earnings Conference call.
The presenters today will reference certain non-GAAP financial measures regularly used by Matador resources and measuring the company's 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.
Speaker 2: transcript
Speaker 2: reconciliation but such non- GAAP financial measures with the comparable financial measures calculated in accordance with gaffer are contained at the end of the company's earnings press release.
Speaker 2: transcript
Speaker 2: As a reminder, certain statements included in this morning's presentation may be forward looking and reflect the company's current expectations or forecast of future events based on the information that is now available.
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 the information that is now available.
Speaker 2: transcript
Speaker 2: actual results and future events could differ materially from those anticipated in such statements.
Actual results and future events could differ materially from those anticipated in such statements.
Speaker 2: transcript
Speaker 2: additional information concerning factors that could cause actual results to differ materially is contained in the company's earnings release and it's most recent and report on form 10k in any subsequent court of the reports on form 10k
Information concerning factors that could cause actual results to differ materially is contained in the company's earnings release and its most recent annual report on Form 10-K, and any subsequent quarterly reports on Form 10-Q.
Speaker 2: transcript
Speaker 2: In addition to our earnings press release, I would like to remind everyone on the call that you can find a slide presentation in connection with the third quarter, 2023 earnings release under the Investor Relations tab on our corporate web.
In addition to our earnings press release, I would like to remind everyone on the call you can find a slide presentation in connection with the third quarter 2023 earnings release under the Investor Relations tab on our corporate website.
Speaker 2: transcript
Speaker 2: And with that, I would now like to turn the call over to Mr. Joe Foren, our founder, chairman, and CEO . Joe?
That I would now like to turn the call over to Mr. Joe Foran, our founder Chairman and CEO Joe.
Speaker 3: transcript
Speaker 3: Thank you, Mack. And thank you all for listening in. It's a pleasure to be here today and a pleasure to give you this report. In very simplest terms, we said at the beginning of the year that, we began the year at 100,000 BLE equivalent, and we're gonna finish the year at 140,000.
Thank you Matt.
And thank you all for listening and it's a pleasure to be here today.
A pleasure to give you this report in very simplistic.
Terms are we.
<unk> said at the beginning of the year that.
We began the year at a 100000 Boe.
Equivalent and we're going to finish the year at 140000, I was wrong, it's going to be 145000.
Speaker 3: transcript
Speaker 3: I was wrong. It's going to be $145,000.
Speaker 3: transcript
Speaker 3: and we're pleased to report in addition to production being up. Our debt is down, cost are down, and we think our opportunities are also up that the plans that we...
And.
We're pleased to report in addition to production being that our debt is Dale Coster day off.
Take our opportunities there also.
That the plans that we put into place.
Speaker 3: transcript
Speaker 3: are proceeding as expected or better than expected.
Are proceeding as expected or better than expected.
Speaker 3: transcript
Speaker 3: And we're excited to report this to you and look for your questions. But we feel we've been in the year 2023 with more inventory, more options and the outlook for 2020.
And we're excited.
Report this to you and look for your questions, but we feel we've ended the year 2023 with more inventory.
More options.
And the outlook for 2024.
Speaker 3: transcript
Speaker 3: that is even better. As strong as this year is, I'll repeat, the 2024 is better. I would point to you, I had two slides in the materials which shows, first one shows our performance over the last five years against our peers.
That is even better as strong as this year is.
And I'll repeat that 2024 is better.
I would point to you I had two slides in the materials.
Which shows.
First one shows our performance over the last five years against our peers.
Speaker 3: transcript
Speaker 3: as selected and we've performed, we feel like we've outperformed them. And the second one is more interesting is our performance since the IPO. The team has made great strides. I give them the credit.
As selected and we've.
We've we've done.
We've performed but we feel like we've outperformed.
And the second one is more interesting.
Our performance since the IPO.
The team has made great strides I gave him.
The credit.
Speaker 3: transcript
Speaker 3: People are really working well together. They come up with good ideas and Matador has continued to grow. When we went public, we were about 300 million. And today the market cap is somewhere around seven and a half billion.
People are really working well together as I've come up with good ideas at Matador has continued.
To grow when we went public we were about $300 million.
And today the market cap is somewhere around $7 5 billion.
Speaker 3: transcript
Speaker 3: but should get better as a year goes along. We've given projections, but they, you know, are confident they will all be realized. I think on slide B, some that struck me as we prepared this was that three times. We have announced.
Yeah.
But it should get better as the year goes along we've given projections, but.
We're confident they will all be realized I think on slide Bay summit.
Strike me as we prepared the ashworth at three times a week.
Speaker 3: transcript
We have announced.
What.
Were very meaningful deals to us the first one was the HEICO deal.
And lately announcing here.
Speaker 3: transcript
Speaker 3: We thought in testing it go up, the things went down, which was a big surprise to us. And then when we did the bought the BLM leases again, we thought the market would easily recognize the potential of these wells. We have now drilled close to 90 wells on these leases. And but instead of going up, things...
We thought anticipating they would go up but thanks with Vale, which was a big surprise to US and then when we did the bought the BLM laces again, we thought the market with easily recognize the potential of these wells.
We have now drilled close to 90 wells on these leases.
But instead of going that thanks.
Speaker 3: transcript
Speaker 3: things plunged and in this deal besides 98 wells happening in the production from them.
Thanks Clarence.
In this deal besides 98 wells.
Happening in the production in front of me.
Speaker 3: transcript
Speaker 3: We went, it enabled us to go from 98% of our wells being one mile at a rls to 98% of our wells being two miles or more and you see the dramatic effect of that.
We are.
It has enabled us to go from 98% of our wells being one mile laterals to 98% of our wells being two miles or more and you say the dramatic effect that Matt.
Speaker 3: transcript
Speaker 3: right after that and things start to stabilize we ran into co-vide uh...
Right after that.
Now you start to stabilize where we ran into COVID-19.
And thanks.
Speaker 3: transcript
Speaker 3: Plunge the GEN, but as we turned on the state line wells, and these wells were paid now, they'd less than a year. It some even paid out at $20 a barrel. You can see where that's taken us to much higher levels. Now we'd end again, but the third time was the charm. We announced the advanced deal, and instead of going up, it went down again. So.
<unk> plans to begin <unk>.
As we turned on the Stateline wells and these wells were paid now that less than a year, it's either paid out at $20. A barrel you can say where thats taken us.
To much higher levels now we are in.
And again, but the third time below the.
Charm win announced they add Vance deal and instead it got went up it went down again so.
Speaker 3: transcript
Speaker 3: But since then, thanks have been going good for us. As you can see, as we've increased the production, as I mentioned first of the year, 100,000, the end of the year, pretty simple math, a hundred and 45,000, we're headed in the right direction.
Uh huh.
But Sam Thanks had been going good for us.
You can see as well.
We've increased the production as I mentioned first of the year of 100000 and ended the year pretty simple math 145000.
Is it in the right.
Direction.
Speaker 3: transcript
Speaker 3: Now, just again, brief history of our Delaware position. We started it when we went public in 2012. At that time, we had six wells. This is slide C.
Now just again Rafe history.
Our Delaware position, where he started when we went public in 2012 at that time, we had six wells. This is slide <unk>.
Speaker 3: transcript
Speaker 3: five years later in 2017 we had two hundred and twelve wells and then now in 2023 we've got 751 wells
Five years later in 2017, we had 212 wells.
And then now.
2023, we've got 751 wells.
Speaker 3: transcript
Speaker 3: and our market cap has increased and all the other important categories have to, including the dividend. And it's with pleasure. We like dividends here. I would like to emphasize that. We're all large shareholders. And over 95% of our employees are participating.
Okay.
Sure.
Market cap has increased and all the other important categories have to include in there David and it's with pleasure.
David <unk> here I would like to emphasize that we're all large shareholders and over 95% of our employees are participating.
Speaker 3: transcript
Speaker 3: in the employees purchase plan.
In the.
Employees purchase plan.
Speaker 3: transcript
Speaker 3: of our stock. So I appreciate the vote of confidence from the staff. We're going to try to deliver. But again, please, that we've had four races that are dividend, and now we're at 80 cents.
Of our stock so I appreciate the vote of confidence from the staff.
We're going to try to deliver.
But again pleased that we've had four races, David Dan and now we're at <unk>.
Bob.
The.
Speaker 3: transcript
Speaker 3: The other progress is you get into it. So we've got production up, our cost are down. We think our inventory selection is better than ever, and debt is down, 200 million.
The other progress as you get into it. So we've got production that our costs are down we think our inventory selection is better than ever and that.
As Dale $200 million.
Speaker 3: transcript
Speaker 3: So we're at 500 million. We have almost a billion of availability under our RBL with our bike group.
So we're at 500.
We have almost $1 billion of availability under our <unk> with our bank group.
Speaker 3: transcript
Speaker 3: So we take we're ready for the optosies. They'll come along this year. And...
So we think we're ready for the opportunities that will come along this year.
And.
Speaker 3: transcript
Speaker 3: but want to answer or address any concerns that you might have. But again, I'm just stating simply that, I think you can count on us to perform.
<unk>.
Yes.
But want to answer or address any concerns that Joel Matt.
That you might have but I think yes, just diving simply that.
Thank you you can count on us to perform.
Speaker 3: transcript
Speaker 3: even better in 2024 than in 2023. And we're making plans accordingly because you have a lot of volatility and uncertainty that we're...
Even better in 2024 and in 2023 and were making plans accordingly.
Because you have a lot of volatility and uncertainty.
Speaker 3: transcript
Speaker 3: trying to be ready for everything, not only on the operation side, but in the...
That were.
Trying to be ready for <unk>.
Not only on the.
Operation side, but in the.
Speaker 3: transcript
Speaker 3: in the world and in Congress and all the other things is happening in whichever way it goes, we're confident we have a good plan to make progress.
In the world and in Congress.
All of the other things is happening.
Everett way it goes where we're confident we have a good plan.
To make progress.
Speaker 3: transcript
Speaker 3: So with that, I'd open up the floor for questions.
So with that I'll open up the floor for questions.
Latif will jump into Q&A. Thanks.
Speaker 1: transcript
Speaker 1: As a reminder, thank you to ask a question you will need to press star 1-1 on your telephone. To remove yourself from the queue, press star 1-1 again.
As a reminder, thank you to ask a question you will need to press star one on your telephone to remove yourself from the queue Press Star one again.
Speaker 1: transcript
Speaker 1: Ladies and gentlemen, due to time constraints, we ask that you please limit yourself to one question and one follow-up. Again, we ask that you limit yourself to one question and one follow-up until we've had a chance. Everyone has had a chance to ask a question after which we welcome additional questions from you. Please stand by while we compile the Q&A roster.
Okay.
Ladies and gentlemen, due to time constraints, we ask that you. Please limit yourself to one question and one follow up again, we ask that you limit yourself to one question and one follow up until we until we've had a chance everyone has had a chance to ask a question after which we welcome additional questions from you. Please standby, while we compile the Q&A Rob.
Okay.
Thanks for standing by our first question.
Speaker 1: transcript
Speaker 1: comes from the line of Scott Hanotte of RBC Capitol Mark.
Comes from the line of Scott Hanold of RBC capital markets.
Speaker 3: transcript
Speaker 3: Yeah, thanks. Good morning. Um, um, um, congrats on, uh, hitting some record volumes this quarter. Um, you know, Joe, you, you'd, uh,
Yes, thanks, good morning.
Congrats on hitting some record volumes this quarter.
Joe you had.
Speaker 2: transcript
Speaker 2: Highlighted the importance of some of these acquisitions you've made over time and the value they continue to add to the editor. With respect, I guess the most recent one to advance. You all have been bringing in some of those first batch of wells.
Highlighting the importance of some of these acquisitions, you've made over time and the value they continue to add to Matador.
With respect to I guess, the most reason one to advance I mean, you all have been bringing in some of those.
Speaker 2: transcript
Speaker 2: I think starting sometime late August , early September , could you give any kind of context on where you're at with that? And some of the initial performance just in terms of your expectation and any kind of tangible data you can provide.
First batch of wells.
Think starting sometime late August early September.
Could you give any kind of context on where youre at with that and some of the initial performance.
Just in terms of your expectation and any any kind of tangible data you can provide.
Speaker 3: transcript
Speaker 3: You know, good question. Scott, the thing that I'd really point you to is it's first of the year we were at 100,000 and we said in the year we were going to go to 40,000, 140,000. And so here we are at 145,000. Obviously, the projections that Tom and the rest of our crew have been on the money and a little bit better, maybe.
Good question.
Scott.
Thank God I had really point you to is its first of the year.
100000, we say the end of the year, we're going to go with 40000 140000, and so here we are at 145000.
Obviously.
The projections that Tom and the rest of our accrued pad has been on the money.
And a little bit better maybe.
Uh huh.
And.
Speaker 3: transcript
Speaker 3: you know, we're early, early times yet, but it looks promising to come in as expected or maybe a little bit better than expected. But we've been acting in that area prior to the acquisition. So we knew that it was good rock area just like what we also had on the joining leases and was just about as perfect a fit.
We're it's early early times, yet, but it looks it looks promising came in as expected or maybe a little bit better than expected but.
We've been active in that area prior to the acquisition. So we knew.
It was good rock area just like what we also had on the joining laces and was just a bad is perfect fit.
Speaker 3: transcript
Speaker 3: on an acquisition as we've had. So no surprises, no big surprises.
On an acquisition as we've.
So no surprises no big surprises.
Speaker 3: transcript
Speaker 3: pretty much as projected, which is nice. It has been real nice and has fit in with our midstream. So...
Pretty much as projected which.
It is not us.
<unk> has been real nice and has fit in with our midstream sale.
Speaker 3: transcript
Speaker 3: You know, that was the biggest acquisition we've ever done. There's always a little bit of weariness when you go into something of that magnitude, but it appears to be working out.
Okay.
Yeah.
That was the biggest acquisition we weighted average then there is always a little bit of wariness. When you go into.
Uh huh.
Something of that magnitude.
But it appears to be working out.
Speaker 2: transcript
Speaker 2: Okay, and I would assume that at some point, as you get more of those wells online, we'll kind of see the typical kind of update on well performance is that a reasonable assumption.
Okay, and then I would assume that at some point as you get more of those wells online will pendency. The typical kind of update on well performance is that is that a reasonable assumption.
Speaker 3: transcript
Speaker 3: Yeah, that's I think very reasonable. We just need we just need a little more time and then we know film
I think very reasonable we just need.
We just need a little more time, and then Lee knowledge.
Speaker 3: transcript
Speaker 3: Well-established decline curves and well-established production history, but it's looking really good.
You know that.
Well established.
The decline curves and well established production history.
And.
Lynn.
But it is looking really good.
Everybody here is as.
Speaker 3: transcript
Speaker 3: is glad we did it. We do think it.
As glad we did it.
We do thank you.
Speaker 3: transcript
Speaker 3: was another important milestone for Matador. So, you know, we've done transactions large and small and they've enjoyed working with a Meredith who was operating and their private equity sponsors. So I think it's a win-win-win type of deal.
Another important milestone for Matador.
So we've done transactions large and small.
And.
And they've enjoyed working with Meredith, who was operating in and yes.
Our private equity sponsors.
It's a win win win type of deal.
Speaker 2: transcript
Speaker 2: Okay, I appreciate that. And as a follow-up question, I know you gave some context last quarter on what you all think about 2024 and a 150 plus.
Okay, I appreciate that and as a follow up question.
I know you gave some context last quarter on what you all think about 2024 and a $1 50 plus.
Speaker 2: transcript
Speaker 2: per day rate on production. And obviously indicated, you know, you know, going to be adding that aith rig in the first part of the year next year. And could you talk about what that means for that production ever you provided? And any color on midstream capex, if you have it, and really specifically, you know, where are we at with potentially finding a partner for pronto and whether you think you need...
Per day rate on production and you are obviously, indicating you are now.
<unk> going to be adding that eighth rig and the first part of the year next year and could you talk about what that means for that production number you provided and any color on midstream Capex. If you have it.
Really specifically.
Where are we at with potentially finding a partner for pronto and whether you think you need to.
Speaker 3: transcript
Speaker 3: That's a really good question. I'm going to take that first, that first, and then we can come back to the other one. It was one is that if we add a new plan, that's about $200 million. Well, that's really a small, very small income comparison to the billion six that we paid for advance. So we have a close to a billion available on our Biel. Cash flow is up.
That's a really good question and I'm going to take that first that first and then we can come back to the other one is.
One is that if we added new plan, it's about $200 million well.
Well, that's really a small very small in comparison to the billion six.
We paid for advance so.
We have.
Close to a billion available on Arbor Yale.
Cash flow was up.
Speaker 4: transcript
Speaker 4: Productions increasing so clearly
And production is increasing.
Clearly.
Speaker 4: transcript
Speaker 4: you know if we had a partner it's because of some enhancement that they bring to the deal but if it didn't win win we're we're going to just go ahead and do it ourselves.
If we had a partner.
It's because of some enhancement that they bring to the deal but if it didn't win win where we were going to just go ahead and do it ourselves.
Speaker 3: transcript
Speaker 3: It's a good opportunity for somebody, but what we're bringing to the table is the production and the staff, the experience field staff to handle it. It's a proven deal. We've operates Ham and Tail in good fashion with a growing.
It's a good opportunity for somebody but what we're bringing to the table is the production.
And the staff.
They experienced field staff.
To handle it.
<unk> deal, we've we've operated San Mateo and good fashion with a growing.
Speaker 4: transcript
Speaker 4: Ibedar Group, Pronto is Come on strong the same way and
EBITDA grew pronto is.
Come on strong in the same way and.
Speaker 4: transcript
Speaker 4: It's close to capacity. We have some short term capacity that we can switch to where we're assured.
It's close to capacity.
We have.
So the short term.
Capacity that we can switch to.
Yes.
Sure.
Speaker 3: transcript
Speaker 3: or firm capacity if that's what we want to do. So there's optionality there. We think this plant, we're moving along with it as if we're, it's just gonna be us. We will. We're moving along with it.
<unk>.
Or firm capacity, if that's what we wanted to so there's optionality there.
I think this plant.
We're moving along with it as if we're just going to be yes.
Lateef: Good morning, ladies and gentlemen. Welcome to the third quarter, 2023, Matador Resources Company earnings conference call. My name is Lateef, and I will I'll be serving as the operator for today. At this time, all participants are in a list and only mode. We will facilitate a question and answer session at the end of the company's remarks. As a reminder, this conference is being recorded for replay purposes, and the replay will be available on the company's website for one year as discussed in the company's earnings press relief issued yesterday.
We will.
Looked at.
Speaker 4: transcript
Speaker 4: Somebody would like to get involved, we'll listen, but we think the economics are such, we're very, very happy to keep it ourselves.
Somebody will likely involve we'll listen but we think the economics are SaaS, we're very very happy to keep it.
Our sales so.
Speaker 3: transcript
Speaker 3: As Greg and I were talking about it, unless it's win-win, we're just not very interested. Greg, you wanna add anything to that? No, I think you said it well. This is Greg Krug, EVP of marketing and the string strategy.
As Greg and I were talking about it unless it's win win and we're just not very interesting Greg you want to add anything to that no. I think you said it well this is Gregg krug EVP of marketing and.
Speaker 3: transcript
Speaker 3: Scott, I think Joe hit it on the head when it comes to what we're looking for. We're looking for a win-win situation here with a possible partner, if that's the direction we want to go.
Midstream strategy, Scott I think thats it.
Lateef: I will now turn the call over to Mr. Mac Schmitz, vice president, investor relations for Matador. Mr. Schmitz, you may proceed. Mr. Schmitz, your line is open, sir. Thank you, Lateef. Good morning, everyone, and thank you for joining us for Matador's third quarter, 2023, earnings conference call. Some of the presenters today will reference certain non-gap financial measures regularly used by Matador Resources in measuring the company's financial performance. Reconciliation of such non-gap financial measures, with the comparable financial measures calculated in accordance with GAP, are contained at the end of the company's earnings press release.
Joe hit it on the head when it comes to.
What we're looking for we're looking for win win situation here with with a possible partner.
Speaker 3: transcript
Speaker 3: but that's the only way that's going to work for us. And, but hey.
That's the direction, we want to go.
But that's the only way that that's going to work for us.
But as.
Speaker 3: transcript
Speaker 3: Again, as Joe said, that is something we can do this on our own and we feel comfortable being able to do so.
Again as Joe said, that's that is something we can do this on our own.
We feel comfortable being able to do so.
Speaker 3: transcript
Speaker 3: uh... we definitely like the growth potential out there uh... with the amount of gas in the drilling that we're doing in also third-party i think there's a lot of opportunity out there for third party
And.
We definitely like the growth potential out there.
The amount of gas and the drilling that we're doing and also the third party I think there's a lot of opportunity out there for third party.
Speaker 2: transcript
Speaker 2: and we definitely are, we feel a really good position to be able to take on that third party gas with the connector as you mentioned earlier. We're looking at being able to do that and also with the plant, the expansion as well. We're looking at, uh ****
<unk>.
We definitely are we feel really good.
Our position to be able to do.
Take on debt.
Third party gas with the connector is as you've mentioned earlier.
Lateef: As a reminder, certain statements included in this morning's presentation may be forward-looking and reflect the company's current expectations or forecasts of future events based on the information that is now available. Actual results and future events could differ materially from those anticipated 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 and report on Form 10K in any subsequent quarterly reports on Form 10Q.
We're looking at being able to do that.
Also with the with the with the plant expansion as well for Brazil.
We like our we like our opportunities out there.
Speaker 4: transcript
Speaker 4: And right, I'm glad you mentioned the connectors because that'll connect up the Ponto plant swinging around and coming through San Mateo and then we've got 550 miles of pipeline out there and this will just give us that.
And Ryan I am glad you mentioned the connectors because that'll connect app.
The pronto plant swing around in coming through San Mateo and they said, we've got 550 miles of pipeline.
Lateef: In addition to our earnings press release, I would like to remind everyone on the call that you can find a slide presentation in connection with the third quarter, 2023, earnings release under the Investor Relations tab on our corporate website.
Out there and this will just give us that much more.
Speaker 3: transcript
Speaker 3: optionality. So Scott, I hope we've answered your question here in particular that the economics on a 200 and heaven full control.
Optionality, so Scott that hopefully that answered your question.
Here in particular that the economics on that 200, and having full control are inviting and the economics superior to getting better.
Mac Schmitz: And with that, I would now like to turn the call over to Mr. Joe Foreign, our founder, Chairman of the year. Joe, thank you, Mack. And thank you all for listening in. It's a pleasure to be here today and a pleasure to give you this report. In very simplest terms, we said at the beginning of the year that we began the year at 100,000 BLE equivalent, and we're going to finish the year at 140,000.
Speaker 3: transcript
Speaker 3: are inviting and the economics appear to be getting better, particularly as we're adding an eighth rig.
Particularly as we're adding an eighth rig.
Speaker 3: transcript
Speaker 3: and going from there. So if you'll repeat your first question, I'll try to answer it quickly.
<unk>.
And going from there so if youll repeat your first question.
Question.
I'll try to answer it quickly.
Speaker 2: transcript
Speaker 2: Yeah, yeah, no, no, I appreciate that. And it was with that eighth rig, you know, where does that, you know, relative to your 150 plus a day prior comment on 2024, how does that eighth rig kind of fit into that?
Yes, yes, no I appreciate that and it was with that eighth rig where does that relative to your 150, plus a day prior comment on 2024, how does that eighth rig kind of fit into that.
Mac Schmitz: I was wrong. It's going to be 145,000. And we're pleased to report in addition to production being up. Our debt is down, cost are down, and we think our opportunities are also up that the plans that we put into place are proceeding as expected or better than expected. And we're excited to report this to you and look for your questions. But we feel we've in in the year 2023 with more inventory, more options, and the outlook for 2024 is even better.
Speaker 3: transcript
Speaker 3: Well, I think, I turn it to Glenn, my view is the eighth rig is being reflected in the 150,000.
Well I think.
Ill turn it to Glenn.
My view is the eighth rig is being reflected in the 150000.
Speaker 4: transcript
Speaker 4: number, and that's part of the reason why we're confident that we'll increase it from present to add to it.
Number and that's part of the reason why we're confident that we'll increase it from present.
To add to our numbers.
Speaker 3: transcript
Speaker 3: and more in year 2025. Glenn?
And <unk>.
And more in year 2025 Grand.
Speaker 2: transcript
Speaker 2: Yeah. Hey, Scott, this is Glenn. Seth, an EVP of production. Yeah, Joe hit it just right. Just to rewind a little bit too, when we picked up the advanced properties, we did operate a rig there for about a month and a half or two months before we dropped it to the seventh rig. And so really just what's new in this release is timing on that eighth rig.
Hey, Scott This is Glenn Stetson EVP of production, yes, Joe hit it just right.
Just just to rewind a little bit too we did when we picked up the advanced properties. We did operate a rig there for about a month and a half or two months before we dropped it to the seventh rig and so really just what's new in this and this release is timing on that eighth rig and say to your point. We did we did soft guide for <unk>.
Mac Schmitz: As strong as this year is, you know, repeat that 2024 is better. I would point to you, I had two slides in the materials, which shows, first one shows our performance over the last five years against our peers. As selected and we've performed, we feel like we've outperformed them. And the second one is more interesting is our performance since the IPO. The team has made great strides. I give them the credit.
Speaker 5: transcript
Speaker 5: say, to your point, we did we did soft guide for 2024 at the $150,000. That was inclusive of.
2024 at 150000.
Speaker 5: transcript
Speaker 5: of an eighth rig, but, you know, the timing piece was what was...
That was inclusive of.
Of an eighth rig but time tie.
Timing piece was was what was.
Speaker 5: transcript
Speaker 5: So, anyway, we are going to pick up that eighth rig in Q1 and look forward to growing production to that 150 plus.
Abstract so anyway.
We are going to pick up that <unk> in Q1 and.
Look forward to.
Growing production to that 150 plus.
Okay. That's clear thank you.
Thank you.
Mac Schmitz: People are really working well together. They've come up with good ideas and Matador has continued. We need to grow. When we went public, we were about 300 million. And today the market cap is somewhere around seven and a half billion. But should get better as the year goes along. We've given projections, but they, you know, are confident they will all be realized. I think on slide B, some that struck me as we prepared this was that three times.
Our next question.
Speaker 1: transcript
Speaker 1: comes from the line of Gabe Dowd of TD Cohen.
Comes from the line of Gabe Daoud.
TV Cohen.
Speaker 6: transcript
Speaker 6: Thank you. Morning, Joe. Morning, everybody. Maybe we could go back to the midstream angle and maybe just following up.
Thank you good morning, Joe Good morning, everybody.
Maybe we could go back to the midstream angle and maybe just following up on Scott's question.
Speaker 6: transcript
Speaker 6: And Joe, you kind of alluded to some in the response, but just curious if the Marlin plan is...
And Joe you kind of alluded to alluded to this in the.
Response, but just curious.
If the Marlin plant.
Speaker 6: transcript
Speaker 6: How does this impact the way the current 21 wells are being flowed back and the next batch of advanced wells?
Full capacity.
How does this impact the way the current 21 wells are being flowed back in the next batch of advance loans.
Mac Schmitz: We have announced what were very meaningful deals to us. The first one was the Haco deal. And immediately announcing it, we thought in testing it, go up the things went down, which was a big surprise to us. And then when we did the, bought the deal, emblices again, we thought the market would easily recognize the potential of these wells. We have now drilled close to 90 wells on these leases. And, but instead of going up, things, things plunged.
Speaker 6: transcript
Speaker 6: and how those will be fall back. I guess you know that you could divert the gas and lead on some lines to San Mateo, but what would the timing of that be like, and how full is the San Mateo?
And how those will be flowed back I guess you noted you.
You can divert the gasoline late on some lines in San Mateo, but what would the timing of that would be like and helpful to San Mateo plants.
Speaker 3: transcript
Speaker 3: Well, that's a whole bunch of questions, all in one sentence, that what I'd simply...
Well, that's all a bunch of questions.
All in one sentence.
That what.
<unk>.
What I had simply.
Speaker 4: transcript
Speaker 4: I'll tell you on that score is that
Okay.
On that score is that.
Speaker 4: transcript
Speaker 4: It's not at full firm delivery capacity. What we are, it has room for a minimum production volume. Customers, right now we're taking some gas, some part of that is gas on a interruptible basis.
It's not at full firm delivery capacity, what we are it has.
Mac Schmitz: And in this deal, besides 98 wells happening in the production from them, we went, it enabled us to go from 98% of our wells being one mile laterals to 98% of our wells. And these wells being two miles or more, and you see the dramatic effect of that. Right after that, and things started to stabilize, we ran into COVID. And things plunged again. But as we turned on the state line wells, and these wells were paid now in less than a year at some, even paid out at $20 a barrel, you can see where that's taken us.
Room for a minimum production volume customers.
Right now we are taking.
Some gas part of that is gas on interruptible basis.
Speaker 3: transcript
Speaker 3: but we can extend it and that's again another reason.
But we can extend it and that's again another reason.
Speaker 4: transcript
Speaker 4: that we see a market out there for more.
That we see a market out there for more.
Speaker 4: transcript
Speaker 4: you know, minimum production volume deals so that people are confident their flow of assurance and we think that can be attractive. So.
Uh huh.
Minimum production volume deals.
So that people are.
We are confident of their flow assurance and we think that can be attractive so.
Speaker 4: transcript
Speaker 4: We're leaving ourselves a flexibility to take up that.
We're leaving ourselves some flexibility to take up that.
Speaker 3: transcript
Speaker 3: that optional space or uh... to bring in third parties on a firm basis uh... the meantime leaving us the option by keeping it on an interruptable basis uh... great that say that right yeah yeah
Uh huh.
That optional space or to bring in third parties on a firm basis.
Mac Schmitz: To much higher levels. Now we had, and again, but the third time was the charm. We announced the advanced deal. And instead of going up, it went down again. So, but since then, thanks have been going good for us. As you can see, as we've increased the production, as I mentioned, first of the year, 100,000, the end of the year, pretty simple math, 145,000, we're headed in the right direction. Now, just again, great history of our Delaware position.
Main time leaves us the option by keeping it.
On an interruptible basis.
Greg It assay that right, yes, yes.
Speaker 4: transcript
Speaker 4: Yeah, it looks like, I mean, we have right now approximately $60 million going into that plant right now, but some of that, as Joe said, is on an interruptible basis. It's short-term contracts, so we do have room for additional capacity on a firm basis that we could push out the interruptible gas, or once those terms are up, we can push that out.
Yes, it looks like we have right now.
Approximately $60 million going into that plant right now.
But some of that as Joe said was is on an interruptible basis, its short term contracts.
So we do have room for additional.
Capacity on a firm basis that we could push out the interruptible gas or once those terms are up we can push that up.
Mac Schmitz: We started it when we went public in 2012. At that time, we had six wells. This is slide C. Five years later in 2017, we had 212 wells. And then now in 2023, we've got 751 wells, and our market cap has increased, and all the other important categories have to include in the dividend. And it's with pleasure. We like dividends here. I would like to emphasize that. We're all large shareholders, and over 95% of our employees are participating in the employees purchase plan.
Speaker 4: transcript
Speaker 4: And then we also have the connector, which we're anticipating having done by the first quarter of next year, which will give us additional capacity and the flexibility as far as bringing it over into the San Mateo system.
And then we also have the the connector, which we're anticipating having done by the the first quarter of.
Of next year, so, which will give us additional capacity and the flexibility as far as bringing it over into the San Mateo system.
Speaker 6: transcript
Speaker 6: Okay. Okay. Thanks, guys. That's helpful. And then my follow-up question would be on 24CATFAC.
Okay. Okay. Thanks, guys. That's helpful and then.
My follow up question would be on 'twenty four capex.
Speaker 6: transcript
Speaker 6: Maybe instead of asking about how the eighth rig impact volume, just curious how the eighth rig and, you know, some of the moving pieces on midstream, how does that translate to a budget for twenty four relative to twenty?
Maybe instead of asking about how the acreage impact volumes just curious how the eighth rig.
Some of the moving pieces on midstream, how does that translate to a budget for 'twenty for relative to 2023.
Mac Schmitz: Of our stock. So I appreciate the vote of confidence from the staff. We're going to try to deliver. But again, please that we've had four raises of the dividend. And now we're at 80 cents. The other progress is you get into it. So we've got production up or cost are down. We think our inventory selection is better than ever. And debt is down 200 million. So we're at 500 million. We have almost a billion of in availability under our RBL with our bike group.
Speaker 7: transcript
Speaker 7: Hey, Gabe, this is Brian Willey, Chief Financial Officer. Thanks for the question, and we appreciate that. I think it's something that we are, you know, continuing to evaluate and look at as we look into the future in 2024.
Hey, Dave This is Brian Reilly, Chief Financial Officer. Thanks for the question and I appreciate that I think it's something that we are continuing to evaluate and look at it as we look into the future into 2024 and <unk>.
Speaker 7: transcript
Speaker 7: You know, Joe mentioned earlier that the great production growth that we're set up for next year, being at the 145,000 BLE per day in the fourth quarter. And we also have 47 net wells and progress at the end of the year, which sets us up nicely to hit that 150,000 BLE or better next year.
Joe mentioned earlier, the great production growth that we're set up for next year being at the 145000 BOE per day in the fourth quarter and we also have 47 net wells in progress at the end of the year.
Which sets us up nicely to hit that 150000 Boe or better next year, So you're thinking about the capex. It's pretty early I mean, I think normally we go into those details in the first quarter I would expect we'll do that in our February call. I mean, obviously there were in a volatile commodity environment in the world market as well with the tensions in the middle East and otherwise.
Speaker 7: transcript
Speaker 7: So thinking about the CapEx, it's pretty early. I mean, I think normally we go into those details in the first quarter. I would expect we'll do that in our February call. I mean, obviously, we're in a volatile commodity environment and the world market as well, with the tensions in the Middle East and otherwise. And so, you know, we don't wanna get ahead of ourselves and our plan, and so there's still a lot of planning left to be done and golf to be played before we're able to talk about that in more detail. So I'd expect more detail on that early next year. Okay.
Mac Schmitz: So we think we're ready for the opportunities that will come along this year. And want to, but want to answer or address any concerns that you might have. But again, I'm just stating that simply that I think you can count on us to perform even better in 2024 than in 2023. And we're making plans accordingly because you have a lot of volatility and uncertainty that we're trying to be ready for everything.
And so we don't want to get ahead of ourselves and our plan and so theres still a lot of planning left to be done in golf to be played before.
We're able to talk about that in more detail. So I would expect more detail on that early next year.
Okay understood. Thanks, Brian Thanks, everyone.
Speaker 3: transcript
Speaker 3: I would add, yes, we've got a plan A, B, and C working for whatever scenario, whether Congress is unable to come together, if there's a, the war expands in the Mideast.
I would add yes, we've got a plan a b and C working for whatever scenario whether Congress.
Isn't enabled come together if there's a.
The war expands and the mid east.
Speaker 4: transcript
Speaker 4: you know, it peace comes or whatever. We're trying to build in all the different options.
And paste piece comes or whatever we're trying to build in.
Mac Schmitz: Not only on the operation side, but in the world and in Congress and all the other things that's happening in whichever way it goes. We're confident we have a good plan to make progress. So with that, I'll open up the floor for questions with people jumping to Q&A. Thanks. As a reminder, thank you to ask a question. You will need to press star 11 on your telephone to remove yourself from the queue.
All of the different options and so.
Speaker 4: transcript
Speaker 4: and so we're prepared to go and have the flexibility to.
So we're prepared to go and have the flexibility to.
Speaker 7: transcript
Speaker 7: move within thirty days in a different direction if uh... circumstances uh... necessitated Joe you're exactly right, I think the optionality piece, the midstream that we've talked about for many years and having that be such an advantage for us I think as we look at the future, I think Joe said it very well, having option A, B, C and just looking at the different opportunities ahead and having that midstream piece that can help support the upstream side is critical as we look towards the future.
Moves within 30 days in a different direction.
<unk>.
Circumstances.
Acetate.
So youre exactly right I think that Optionality piece, the midstream that we've talked about for many years and having that would be such an advantage for us I think as we look at the future I mean, Joe Joseph very well, having ops and ABC and just looking at the different opportunities ahead.
And having that midstream piece that can help support the upstream side is critical as we look towards the future.
Speaker 4: transcript
Speaker 4: Yeah, I would, I'd say our key word around here is being nimble, being prepared to move as these uh
Mac Schmitz: Press star 11 again. Ladies and gentlemen, due to time constraints, we ask that you please limit yourself to one question and one follow up. Again, we ask that you limit yourself to one question and one follow up until we've until we've had a chance. Everyone has had a chance to ask a question after which we welcome additional questions from you. Please stand by while we compile the Q&A roster. Thanks for standing by our first question.
Yes.
I'd say, our key word around here is being nimble and being prepared to move as these.
Speaker 4: transcript
Speaker 4: things come to rest in one direction or another.
Thanks come to rest in one direction or another.
Okay.
Thanks, Jeff.
Thank you.
Okay.
Speaker 1: transcript
Speaker 1: Our next question comes from the line of Zach Parham of JPMorgan.
Yes.
Our next question comes from the line of.
Zack <unk> of J P. Morgan.
Speaker 4: transcript
Hey, guys. Thanks for taking my question.
First could you just give us some updated thoughts on well productivity in general just looking at the state data well productivity seemed down a bit versus 2022 on average and I know that data has its issues in the public data is a bit delayed but just curious.
Joe Foran: Comes from the line of Scott Hanon of RBC capital markets. Yeah, thanks.
Scott Hanold: Good morning. Congrats on hitting some record volumes this quarter. You know Joe, you'd Highlighted the importance of some of these acquisitions you've made over time and the value they continue to add to Matador and with respect, I guess the most recent one to advance, you all have been bringing in some of those first batch of wells, I think starting some time late August, early September. Did you give any kind of context on where you're at with that and some of the initial performance just in terms of your expectations.
If thats, what youre seeing internally or if if productivity is kind of in line with your internal expectations.
Speaker 2: transcript
Speaker 2: hey, this is Tom Elson, EVP for Reservoir. You know, we're proud of our well results. I think...
Hey, Zach this is Tom Elsner ADP for reservoir.
We're proud of our of our well results I think.
Speaker 2: transcript
Speaker 2: You know, as we talked for quite some time, that the Northern Delaware Basin has been, you know, a great part of the basin for us, you know, the very high, very high oil cuts and the low water cuts, you know, are things that we're really proud of. You know, many of the wells in the Northern Delaware Basin, they don't have as much gas, and so they, you know, some of them will come online with ESPs or other types of artificial lifts.
As we've talked for some quite some time that the northern Delaware Basin has been great.
A great part of the basin for us, they're very high very high oil cuts in the low water cuts.
Are things that we're really proud of many of the wells in the northern Delaware Basin.
Scott Hanold: And any kind of tangible data you can provide. You know, good question. Scott, the thing that I'd really point you to is it's first of the year we were at 100,000 and we said end of the year we're going to go to 40,000, 140,000 and so here we are at 145,000. Obviously the projections that come and the rest of our crew passed. We have been on the money and a little bit better, maybe.
They don't have as much gas and so some of them will come online with ESP or other types of artificial lift.
Speaker 2: transcript
Speaker 2: I think over the years, I think we've been a really nice job of anticipating the way these wells would behave. And I think we've made great strides in our lateral links and our targeting, certainly Max Com and all of our operations team that's had a great role to play in that. I think our Resonurigerent Department has been a really nice job of anticipating how these wells would perform. And so I think we've done a really nice job in that department.
But I think over the years I think we've done a really nice job of anticipating that the way. These wells would behave and I think we've made great strides in our in our lateral lengths in our targeting.
Certainly maxx com and all of our operations team has had a great.
Great role to play in that I think our reservoir engineering departments have done a really nice job.
Anticipating the how these wells would perform and so.
Scott Hanold: And you know, we're early early times yet, but it looks, it looks promising to come in as expected or maybe a little bit better than expected, but we've been acting in that area prior to the acquisition. So we knew, you know, that it was good rock area, just like what we also had on the joining leases and was just about as perfect a fit on an acquisition as we've had. So no surprises, no big surprises.
I think we've done a really nice job in that in that department.
Speaker 3: transcript
Speaker 3: I'd just add, second that, that I do think a reservoir group led by Tanner.
And just to add.
Second path that I do think our reservoir group led by Tanner.
Speaker 4: transcript
Speaker 3: has done a real good job, and when we've had the outside consultant, Evelyn and Sewell, they've been right on the money, and our bank engineers, the same thing. If it hadn't been, we'd have been 10% ahead. All three groups have been right on the money, so we feel we have good confidence.
<unk> done a real good job and when we've had the outside consultant Netherland and Sewell.
They have been right on the money in our bank <unk>.
Engineers the same thing here haven't been we've been 10% ahead.
It's everybody has been right on all three groups bid round the money. So we feel we have good confidence and.
Scott Hanold: It's pretty much as projected, which is nice has been real nice and has fit in with our midstream. So, you know, that was the biggest acquisition we've ever done. There's always a little bit of weariness when you go into something that magnitude, but it appears to be working out. Okay, and I would assume that at some point, as you get more of those walls online, we'll kind of see the typical kind of update on well performance.
Speaker 4: transcript
Speaker 4: You know, we're figuring out ways to improve that profile.
Yeah.
Yes.
Figuring out ways to improve that that profile.
Speaker 3: transcript
Speaker 3: on the well. Feel like we're growing better wells today. Then we were even back then and feel like we're completing them better. And that
On the wells, we're drilling better wells today.
And labor.
Even back then and Phil <unk> completing them better.
Speaker 4: transcript
Speaker 4: and that the MAXCOM room has kept us more in zone. And I know that may be something people hadn't seen, but our visitors that come in seem to really like the room and can see how staying in zone longer, 10% more on a million barrel well could mean 100,000 barrels. So we
And that.
And that the Max Com room has kept us more in zone and I know that maybe some people had in say, but our visitors that come in same day really lagged room, they can say Hal staying in zone.
Longer 10% more on a million barrel well could mean, a 100000 barrels.
Scott Hanold: Is that a reasonable assumption? Yeah, that I think very reasonable. We just need, we just need a little more time and then we know film. You know, that a well established decline curves and well established production history, and we, but it's looking really good. But, you know, everybody here is glad we did it. We do think it was another important milestone for Matador. So, you know, we've done transactions large and small.
Speaker 4: transcript
Speaker 4: We think there's, we're glad to see the improvements and
We think there is.
We're glad to see the improvements.
Speaker 4: transcript
And.
But we're looking for more ways to do each well better by increments.
Speaker 4: transcript
Speaker 4: Got it. Thanks, guys. And then just one follow up on the cash flow statement for the quarter. There was 65 million in acquisitions. You know, could you give us a little color on maybe what was acquired and.
Got it thanks, guys and then just one follow up on the cash flow statement for the quarter, there was $65 million in acquisition.
Could you give us a little color on maybe what was acquired and.
Speaker 5: transcript
Speaker 6: quantify the production impact from those acquisitions.
Quantify the production impact from from those acquisitions.
Speaker 4: transcript
Speaker 3: You know, you're getting probably into something that...
Even though youre getting probably in some of that.
Speaker 4: transcript
Speaker 4: is difficult to break down. Some were small, some were larger. It's just a whole mix of
Okay.
Is it is difficult to bright breakdown some are small some are larger.
Scott Hanold: And, and they've enjoyed working with Meredith, who was operating in and their private equity sponsors. So, I think, you know, it's a win-win-win top of deal. Okay, I appreciate that. And as a follow-up question, you know, I know you gave some context last quarter on what you all think about 2024 and a 150 plus per day rate on production. And you're obviously indicated, you know, you know, going to be adding that eighths rig in the first part of the year next year.
It's just a whole mix of.
Speaker 4: transcript
Speaker 3: of items in that kind of a stew pot.
Of items in that kind of a steady path.
Speaker 7: transcript
Speaker 7: or thanks go in but uh... you want to take a hand at brine sure jill this is brine i'd say jill said very well i think it's a mix of you know dozens of deals and and you know as we look at it got not off included it's got operated well and increasing our interest in those
Our thanks go in but.
Do you want to take a hand added Brian sure. Joe. This is Brian I'd say, Joe said, it very well I think because it makes of.
Dozens of deals and as we look at it it's got a non op included it's got operated wells and increasing our interest in those.
Speaker 7: transcript
Speaker 7: new acreage, it's just, it's a broad mix. And so our land group just does a tremendous job. We've talked about this for many years, this brick by brick approach of.
New acreage.
Scott Hanold: And could you, you know, talk about what that means for that production ever you provided and any color on, on midstream capex, if you have it, and, and really specifically, you know, where we are with, you know, potentially finding a partner for pronto and, and whether you think you need. 32. That's a really good question. I'm going to take that first, that first, and then we can come back to the other one is one is that if we add a new plan, that's about $200 million.
That's a broad mix and so our land group. This is a tremendous job we've talked about this for many years this brick by brick approach of.
Speaker 7: transcript
Speaker 7: of building the company in this kind of organic growth. So shout out to Vann and to John Tilberg and Brian Irman and the rest of the team. It does just such a good job in doing these bills and brick by brick continuing to build our position in the Delaware Basin. I think Joe reviewed this slide earlier that talked about the number of wells and how we'd increased on that front. It also shows the acreage and how back in 2012 we had
Building the company and this is kind of organic growth and so.
Its head out to the van and.
John Silver and Brian Herman and the rest of the team does such a good job in doing these deals and brick by brick continuing to build our position in the Delaware Basin I think Joe review. This slide earlier that talked about the number of wells and how we'd increased on that front. It also shows the acreage and how back in 2012, we had.
Speaker 7: transcript
Speaker 7: We were right around 6,000 acres and now we're over 150,000 net acres. And you know, it's just great to be able to increase and see that growth over the years. And so great, great job to the land team.
Scott Hanold: Well, that's really a small, very small and comparison to the billion six that we paid for advance. So we have close to a billion available on an RBL. Cash flow is up. Productions increasing. So clearly, you know, if we had a partner, it's because of some enhancement that they bring to the deal. But if it didn't win, win, where we're going to just go ahead and do it ourselves. It's a good opportunity for somebody, but what we're bringing to the table is the production and the staff, the experience field staff to handle it.
Right around 6000 acres and now we're over 150000 net acres and it's great to be able to increase them and see that growth over the years and so a great great job to the land team.
Got it thanks guys.
Yeah.
Okay.
Thank you.
Our next question.
Speaker 1: transcript
Speaker 1: comes from the line of Neil Dingman of Truist.
Comes from the line of Neal Dingmann of Truest.
Speaker 5: transcript
Speaker 6: Morning, Joe and Tim. I'd like to congratulate another nice quarter. Joe, my first question maybe is to broad question on your comments a few minutes ago. I'm just wondering.
Good morning, Joe and team congrats on another nice quarter.
So my first question, maybe just a broad question on on your comments a few minutes ago. I'm. Just wondering would you plan what are you, suggesting with your planned activity and decision to add an eighth rig and boost production next year.
Speaker 8: transcript
Speaker 8: Would you suggest in with your plan to activity and decision to add an eighth rig and produce a next year change if prices fell for various reasons or maybe if I could ask another way, I mean how do you all view the very limited maintenance capital and production plans by many other reappees? I love what you all are doing to create value. I'm just curious to know how you all are thinking.
<unk>.
Prices fell for various reasons or.
Maybe if I could ask another way I mean, how do you all view, the very limited maintenance capital and production plans by many other e&ps that love what you all are doing to create value.
Scott Hanold: It's a proven deal. So we've, we've operates Hamilton in good fashion with a growing EBITDA Group. Pronto has come on strong the same way. And it's close to capacity. We have some short term capacity that we can switch to, you know, where we're assured, you know, some or firm capacity if that's what we want to do. So there's optionality there. We think this plant, we're moving along with it as if we're, it's just going to be us.
Curious to know how you all are thinking about it.
Speaker 4: transcript
Speaker 3: you know you've got the guys here they're all pretty strong minded people so i have state is that my opinion reflects everybody else's is that there's some pretty active discussion uh... around what's the best way to go but what i say is
Well.
You've asked the gas here they all of them. They are all pretty strong minded people, so I hesitate to say.
In my opinion reflects everybody else's.
There is some pretty active discussion.
Around what's the best way to go but what I'd say is.
Speaker 4: transcript
Speaker 4: That the eighth rig, I think, is pretty firm.
No.
That the eighth rig I think is pretty firm.
Speaker 4: transcript
Speaker 3: You know, we think that, you know, if commodity prices change, you know, if it changes a buck or two, it's not even going to be material. And, you know, how much do they have to change before you'd even consider? Because this.
We think that.
If commodity prices change and it changes a buck or two it's not even going to be.
Scott Hanold: We will, you know, look to somebody we like to involve. We'll listen, but we think the economics are such we're very, very happy to keep it ourselves. So as Greg and I were talking about it, unless it's win-win, we're just not very interested. Greg, do you want to add anything to that? No, I think you said, well, this is Greg Krug, EVP of marketing and mainstream strategy. Scott, I think that's the, I think Joe hit it on the head when it comes to what we're looking for.
Material and how much does that have to change.
Or you would even consider because this.
Speaker 4: This rings coming on to drill some specific oils that are important to our evaluate in our overall acreage and so I don't think we're
This ranks coming on to drill some specific wells that are important to our.
Evaluating our overall acreage and so.
So I don't think we are.
Speaker 4: you know, at this point, seriously thinking, well, we're going to take this rig on for a little bit and then we may let it go.
Okay.
At this point seriously.
Thank you all again <unk> gone for a little bit and then we may let it go.
Speaker 4: transcript
Speaker 4: We're later getting on our rig so we have that optionality uh... but
Where land or Dan on our rigs so we have that optionality.
Scott Hanold: We're looking for win-win situation here with the possible partner. If that's the direction we want to go, but that's the only way that that's going to work for us. But as, again, as Joe said, that is something we could do this on our own and we feel comfortable being able to do so. And we definitely like the growth potential out there with the amount of gas and the drilling that we're doing and also the third party.
But.
Speaker 4: transcript
Speaker 3: The economics of ADMAC A3 looks pretty darn good and I can't see us doing it unless something...
The economics of AD Mick eighth rig looks pretty darn, good and I can't say is doing it.
Unless.
Speaker 4: transcript
Speaker 4: you know, Black Swan event. And I'd also like to thank Patterson, who's been a great partner in these endeavors with us. And, you know,
You know black Swan event and.
I'd also like to thank Patterson.
Patterson has been a great partner in these endeavors.
With us.
And.
You know we've worked together.
Speaker 4: transcript
Speaker 4: And they've done so well in improving the cost structure that, you know, Chris was.
And they've done so well.
Scott Hanold: I think there's a lot of opportunity out there for third party and we definitely are, we feel a really good position to be able to take on that third party gas with the connector as you mentioned earlier. We're looking at being able to do that and also with the plant expansion, as well. We like our opportunities up there. And, right, I'm glad you mentioned the connectors, because that will connect up the Ponto plant, swinging around and coming through San Mateo, and we've got 550 miles of pipeline out there, and this will just give us that much more optionality.
And improving the cost structure.
Speaker 4: transcript
Speaker 4: and Patterson had worked out this year, I see the same thing happening if prices fall dramatically. Patterson is really good, you know, to help us be more efficient.
Chris was.
Patterson had worked out this year.
I would say the same thing.
And if prices fall dramatically.
Patterson is really good.
Okay.
To help us.
Being more efficient.
On our drilling and.
Speaker 4: transcript
Speaker 2: and the supplies. Chris, do you want to say that? Yeah, yeah. Hi, Neil. This is Chris Calvert.
And the Splash, Chris do you want to say that yes, yes, hi, Neal This is Chris Calvert.
Speaker 2: transcript
Speaker 2: the pco chief operating officer uh... you know i think joseph a wild obviously that the value that we place on the relationship with batterson is something that is this extremely important to us you know the
VP co Chief operating officer.
I think Joe said, it well obviously the value that we place on the relationship with Patterson as something that is extremely important to us.
Speaker 9: transcript
Speaker 9: The idea of the eighth rig, we were talking about the right time to add that in, I think.
The idea of the eighth rig.
We're talking about the right time to add that and I think the foundation under that decision or a lot of that foundation is is execution and how can this rig come help us execute our plan not only for 2024, but also to continue to drill wells.
Speaker 9: transcript
Speaker 9: The foundation under that decision, or a lot of that foundation, is execution and how can this rig come help us execute our plan not only for 2024, but also to continue to drill wells in a faster way, in a more cost-efficient manner. You look at the relationship with Patterson that goes back decades.
Scott Hanold: So, Scott, I hope we've answered your question here, in particular, that the economics on a 200 and a half full control are embodying, and the economics appear to get better, particularly as we're adding an eighth rig and going from there. So, if you'll repeat your first question, I'll try to answer it quickly. Yeah, yeah, no, no, I appreciate that. And it was with that eighth rig. You know, where does that, you know, roll to be your 150 plus a day prior comment on 2024, how does that eighth rig kind of fit into that?
<unk> way in a more cost efficient manner and so you look at the relationship with Patterson that goes back decades. It is something that has been built.
Speaker 9: transcript
Speaker 9: It is something that has been built of an understanding of we know what our expectations are, patterns and knows.
And understanding of we know what we're what our expectations are Patterson knows and.
Speaker 9: transcript
Speaker 9: and it comes with a high-tech super spec rig. It comes with a very competent, exceptional crew. It comes with these things that really allow us.
It comes with a high tech Super spec rig it comes with a very competent exceptional crew. It comes with these things that really allow us to continue to execute in a way of reducing drilling days.
Speaker 4: transcript
Speaker 2: continue to execute in a way of reducing drilling days, of reducing well costs and things like that. And so the optionality obviously is very important to us, but it's also the understanding that we know what we're going to expect, and that's a high-tech, super-spec rig. It's gonna be able to drill wells like U-turns, longer laterals, things like that, that allow us to continue to improve on the operational front. One other I'd add to Chris is that.
Reducing well costs and things like that and so the Optionality, obviously is very important to us, but it's also the understanding that we know what we're going to expect and that's that's a high tech Super spec rig, it's going to be able to drill drill wells like U turns longer laterals things like that that allow us to continue to improve on the operational front.
Scott Hanold: Well, I think, I'm trying to grant my view as the eighth rig is being reflected in the 150,000 number. And that's part of the reason why we're confident that we'll increase it from present to add to our numbers. And more in year 2025, Glenn. Yeah. Hey, Scott, Glenn set an EVP of production. Yeah, Joe, go ahead, it's just right. We, you know, just rewind a little bit too. You know, we did, when we picked up the advanced properties, we did operate a rig there for about a month and a half or two months before we dropped it to the seventh rig.
On the other I would add Chris is that fair.
Speaker 4: transcript
Speaker 2: with Patterson we have a long history going back 40 years that when Patterson drilled my first well out there and Subsequently either Patterson or their predecessors have been the
With Patterson, we have a long history going back 40 years that when Patterson drilled my first well out there and subsequently either patter centers or their predecessors have had.
Speaker 4: transcript
Speaker 4: guys have drilled the wells and what we've always done
We have been.
Guys have drilled the wells and what we've always done if you look at our history is that when times get tough and prices really go down we don't stop drilling.
Speaker 4: transcript
Speaker 4: you look at our history is that when times get tough and prices really go down, we don't stop drilling.
Speaker 4: transcript
Speaker 4: uh... that's times that we feel we'd make most progress so i don't wish for bad price
That's the times that we feel we've made nice progress so I don't wish for bad prices by any means but Patterson knows just because prices go down we're not going to start start dropping rigs like they were flat to each time, we take an array.
Scott Hanold: And so, really, just what's new in this, you know, in this release is timing on that eighth rig. And so, to your point, we did soft guide for 2024 at the 150,000. And that was inclusive of an eighth rig. But, you know, the timing piece was what was, you know, abstract. So anyway, we are going to pick up that eighth rig in think you want and look forward to, you know, growing production to that 150 plus.
Speaker 4: transcript
Speaker 4: by any means, but Patterson knows just as prices go down, we're not going to start dropping rigs like they were flies. Each time we take on a rig, we've got a planned sequence of wells for them to drill that fit their requirements.
Joe Foran: Okay, that's clear. Thank you.
We've got a plan sequence of wells for them to drill that fit there.
Speaker 4: transcript
Speaker 4: you know, their equipment and their location and
Their equipment and their location.
Speaker 9: transcript
Speaker 9: So I think you'll see us even if the process goes down, we're going to keep rigs running. And that's the times that we feel we make the most progress, Chris. Yeah. Yeah. 100% that is something that we are very proud of. When we've seen some of these.
Tab.
So.
I think youll see us.
If prices go down we're going to keep rigs running.
And Thats the times that we feel we can make the most progress Chris Yes, yes, 100% that is something that we are very proud of when we've seen some of these.
Gabe Dowd: Our next question comes from the line of Gabe Dowd of TD Cohen. Thank you. Morning, Joe. Morning, everybody. Maybe we could go back to the midstream angle and maybe just following up on Scott's question. And Joe, you kind of alluded to alluded to this in the response, but just curious. If the Marlin plant is at full capacity, how does this impact the way the current 21 wells are being flowed back and the next batch of advanced wells and how those will be flowed back?
Speaker 9: transcript
Speaker 9: pricing environments where oil dips down in say COVID times, we did make some of those best operational achievements, whether it was stay-line wells, lateral length extensions into two and two plus mile laterals, Simon Frack, all these things were a function of the work that was done during a down cycle in the commodity price. So if we didn't have that maintained level of activity, we wouldn't be talking about some of the operational prices that we have today.
Pricing environments, where oil dips down in say Covid times, we did make some of those best operational achievements, whether it was stateline wells.
Lateral length extensions into two and two plus mile laterals simulcast you. All these things were were a function of the work that was done during a down cycle in the commodity price and so if we didn't have that maintained level of activity.
We wouldn't be talking about some of the operational practices that we have today.
Speaker 8: transcript
Speaker 8: Now that all makes sense, I'll let the details in and Joe, maybe question for you Brian , just run my second question.
No that all makes sense to let the details and then Joe maybe a question for you or Brian just around my my second question.
Speaker 8: transcript
Speaker 8: You know, noting that you don't have 24 specific guidance that you mentioned, potential higher production. And I'm just wondering, given the higher production, but in the release, you guys talked about the better than expected. VCE and E, Catholic expenditures and midstream expenditures. I'm just wondering, are you able to give some, you know, maybe goalposts or some just broader issues around what maybe to spend might look like next year if you add that A3.
Gabe Dowd: I guess, you know, that you could divert the gas and lead on some lines to San Mateo. But what would the timing of that be like? And how follows the San Mateo? Well, that's all bunch of questions all in one sentence that what I what I'd simply tell you on that score is that it's not at full firm delivery capacity. What we are, it has room for a minimum production volume. Customers, right now we're taking some gas, some part of that is gas on a interruptible basis, but we can extend it.
Noting that you don't have 24 specific guidance that you mentioned the potential higher production and I'm just wondering given the higher production, but in the release you guys talked about the better than expected do you see any capital expenditures and midstream expenditures I'm. Just wondering are you able to give some maybe goalposts some broader issues around what may be the <unk>.
Ben might look like next year, if you add that eighth rig.
Speaker 4: transcript
Speaker 4: Well, I'd just say, Neil, in February , we've announced that we'll be giving you this detail. And if it comes together earlier, we'll be happy to share it with you.
Well I'd, just say nail in February we've announced that we'll be giving you this detail and if it comes together earlier, we'll be happy to share it with you.
Speaker 8: transcript
Speaker 8: Okay, okay, I would just curious, given how good the DC and the U sounds like it's continuing to go.
Okay. Okay I was just curious given how good the.
Do you see any it sounds like it's continuing to grow.
Thank you.
Please standby for our next question.
Speaker 1: transcript
Speaker 1: It's gonna spend the line of Tim Resan of Keybank Cap.
Gabe Dowd: And that's, again, another reason that we see a market out there for more, you know, minimum production volume deals so that people are confident their flow is sure. We think that can be attractive. So we're leaving ourselves a flexibility to take up that, that optional space or to bring in third parties on a firm basis. The meantime, leaving us the option by keeping it on an interruptible basis. Greg, could I say that right?
Which comes from the line of Tim <unk> of Keybanc capital markets.
Speaker 10: transcript
Speaker 10: Good morning folks, I wanted to circle back on gas processing one more time and try to sort of tie a bow on the issue for 2024 because it's a big debate point in the marketplace. You're ending the year with 47 wells and progress. You've committed to eight rigs.
Good morning folks I wanted to circle back on gas processing, one more time and try to sort of tie a bow on the issue for 2024, because it's a big debate pointed in the marketplace. You are ending the year with 47 wells in progress you've committed to eight rigs.
Speaker 10: transcript
Speaker 10: and we don't expect to see a new plant operational before 2025. So as you build out your drill schedule, what level of confidence do you have that every single well you're gonna bring online, you will have either in-house or third party processes. Just trying to understand, will that be a constraint on the program next year?
And we don't expect to see a new plant operational before 2025 so.
As you build out your drill schedule.
Level of confidence do you have that every single well youre going to bring online you will have either in house or third party processing, just trying to understand will that be a constraint on the program next year.
Gabe Dowd: Yeah, yeah. Yeah, it looks like, I mean, we have right now approximately 60 million going into that plant right now, but some of that, as Joe said, was on an interruptible basis. It's a short term contracts. So we do have room for additional capacity on a firm basis that we could push out that the interruptible gas or once those terms are up, we could push that out. And then we also have the connector which we're anticipating having done by the first quarter of next year.
Speaker 11: transcript
Speaker 5: Hi, Tim. This is Glenn Stetson, EVP Production. I would say very confident. We have, you know, the way that these two businesses have worked together, well, three businesses now with Pronto, you know, between the midstream and the upstream side of the business, you know, we are constantly talking to each other about our development plans and looking for, you know, looking into the future to make sure that we have adequate capacity. So, and there's obviously multiple variables.
Hi, Tim This is Glenn Stetson EVP production.
I'd say very confident.
The way that these two businesses have worked together a three businesses now with pronto between the midstream and the upstream side of the business.
Are constantly talking to each other about our development plans and looking for looking into the future.
To make sure that we have adequate capacity, so and there is and there is obviously multiple variables.
Speaker 11: transcript
Speaker 5: that account for that, you know, the gathering is one. The processing is another. And then, you know, how do we get gas out of the basin? And so, we, you know, we pride ourselves in having optionality. We pride ourselves on having multiple options when it comes to getting our gas out of the basin and having different options for gathering and processing. And so, we have redundancy in a lot of cases at some of our more prolific.
That account for that the gathering is one and.
The processing is another and then how do we get gas out of the basin and so.
Gabe Dowd: So which will give us additional capacity and the flexibility as far as bringing it over into the San Mateo system. Okay. Thanks, guys. That's helpful. And then my follow-up question would would be on 24 cat's X and maybe instead of asking about how the eighth rig impact volume just curious how the eighth rig and, you know, some of the moving pieces on midstream.
We pride ourselves in having optionality, we pride ourselves on having multiple options when it comes to <unk>.
Getting our gas out of the basin and having different options for.
Gathering and processing and so we have redundancy in a lot of cases.
At some of our more prolific facilities, where we can go we actually have options for for our gas and so.
Speaker 11: transcript
Speaker 5: uh... facilities where we can you know go we actually have options for for our gas and so uh... and Greg and joe highlighted it earlier you know as we as we look into twenty twenty four uh... something that you know will will provide some more capacity for us is is this connection down to
Brian Willey: How does that translate to a budget for 24 relative to 2023?
Greg and Joe highlighted earlier.
Brian Willey: Hey, Gabe. This is Brian Wiley Chief Financial Officer. Thanks for the question. And we appreciate that. I think it's something that we are, you know, continuing to evaluate and look at as we look into the future in 2024. And, you know, Joe mentioned earlier that the great production growth that we're set up for next year, being at the 145,000 BUE per day in the fourth quarter. And we also have 47 net wells and progress at the end of the year.
As we look into 2020 for something that will provide some more capacity for US is this connection down to the.
Speaker 11: transcript
Speaker 5: the advanced properties and southern ranger and then and then over to you know from pronto to to Samateo to swing gas there so we are you know
The advanced properties.
And southern Ranger and then.
And then over to from Pronto to San Mateo to swing gas there so.
We are.
Brian Willey: And which sets us up nicely to hit that 150,000 BUE or better next year. So we think about the cat backs. It's pretty early. I mean, I think normally we go into those details in the first quarter. I expect we'll do that in our February call. I mean, obviously there were in a volatile commodity environment and the world market as well with the tensions in the Middle East and otherwise. And so, you know, we don't want to get ahead of ourselves and our plan. And so there's still a lot of planning left to be done. And golf to be played before we were able to talk about that in more detail.
Speaker 11: transcript
Speaker 5: We are aware of all the activity that's going on in the basin and again, preparing ourselves for as many different scenarios as possible. But again, the strategic nature of having your midstream businesses that provide flow assurance for the upstream business, I think is unique to Matador. And certainly, as somebody who's really in charge of production, it gives me a lot of comfort.
We are aware of.
All the activity that's going on in the basin and again are preparing ourselves for as many different scenarios as possible, but but again the strategic nature of having.
Your midstream businesses that.
Provide flow assurance for the upstream business I think is unique to Matador and certainly.
As somebody who's really in charge of production and gives me a lot of comfort.
Speaker 11: transcript
Speaker 5: And again, confidence in our ability to execute on the plans that we put out.
Joe Foran: So I'd expect more detail on that early next year. Okay, thank you for all the comments. I would add just we've got a plan A, B and C working for whatever scenario whether Congress is unable to come together if there's the war expands in the mid-east. You know, peace comes or whatever, we're trying to build in all the different options and so we're prepared to go and have the flexibility to move within 30 days in a different direction if circumstances necessitated.
And again confidence and in our ability to.
To execute on the plans that we put out.
Speaker 10: transcript
Speaker 10: I appreciate the comprehensive answer to the question. And then as you follow up.
Okay I appreciate the comprehensive answer to the question.
And then Ed.
Speaker 10: transcript
Speaker 10: I remember in the past as it related to 2023, management had talked about it as a, passable around year in terms of, rakes being spread across your footprint. How do you think about rake allocation in 2024, given the really high oil cut to the ranger, but possible gathering, except there.
A follow up.
I remember in the past as it related to 2023 manner.
Management had talked about it as a pass the ball around year in terms of rigs being spread across your footprint.
How do you think about rig allocation in 2024.
They're really high oil cuts in ranger, but possible.
Gathering and kept.
Speaker 2: transcript
Speaker 11: Okay, then this is Tom Alston or again, you know that, I guess the way we think about it is, you know, all the different acid areas have contributed, you know, in a very meaningful way. We...
There thank.
Thank you.
Okay, Hey, Tim This is Tom I'll Center again.
I guess the way we think about it is all the different asset areas have contributed in a very meaningful meaningful way.
Joe Foran: Bill, you're exactly right. I think I'm optionally peace, the midstream that we've talked about for many years and having that be such an advantage for us. I think as we look at the future, I think Joseph are very well having option A, B, C and just looking at the different opportunities ahead and having that midstream peace that can help support the upstream side as critical as we look towards the future. Yeah, I would say our key word around here is being nimble, being prepared to move as these things come to rest in one direction or another. Thanks, Jeff.
Joe Foran: Thank you.
Speaker 2: transcript
Speaker 11: You know, we've certainly, you know, the Ranger Wells is we've, if we've talked about a little bit today, it's very proud of.
We've certainly.
The range of wells as we've talked about a little bit today, so very proud of.
Speaker 2: transcript
Speaker 11: You know, we have a big, Dr. Wells coming along and arrowhead here in the fourth quarter and
We have a big catch of wells coming online in Arrowhead here in the fourth quarter and we've been in Antelope Ridge.
Speaker 2: transcript
Speaker 11: We've been in Antelope Bridge for many, many years. These new Corsi Wells under the Wolf area, we're seems to very proud of those. Russell Breaks has been making some great strides and creating two mile laterals out of some of the shower targets and reusing some of the same drilling pad and infrastructure over the last several years. And so...
For many many years these new horseshoe wells under the Wolf area, where our teams are very proud of those rustler breaks has been.
Making some great strides in creating two mile laterals out of some of the shallower targets in re reusing some of the same drilling pad and infrastructure over the last several years and so.
Speaker 2: transcript
Speaker 11: you know i do i do think will probably spread the ball around uh... but it's you know it's too early uh... road again in those details today uh... but certainly all of our all of our teams are contributing uh... in a very meaningful way
Tom Elsener: Thanks, Jay. Our next question comes from the line of Zach Parham, object, you're marking. Thanks for taking my question. First, could you just give us some updated thoughts on well productivity in general, you know, just looking at the state data, well productivity seems down a bit, verse 2022 on average. And I know that data has its issues and the public data is a bit delayed, but just curious if that's what you're seeing internally or if productivity is kind of in line with your internal expectations.
I do I do think we will probably spread of all around.
It's too early really to get into those details today.
But certainly all of our all of our teams are contributing in a very meaningful way.
Speaker 4: transcript
Speaker 4: Yeah, and I just would add that I understand you'd like to have all these numbers in detail today, but it's not in our best interest to do so with all the volatility and the options are. We'll have them for you. It's just the timing, it didn't fall on today. We may have them by the end of the year, but as things come together, but you want to see
Yeah.
<unk> would add that on there.
Stan you'd like to have all of these numbers in detail today, but it's not in our best interest.
To do so with all the volatility and the options are we'll have them for yes. It's just the time and it didn't fall on today, we may have them by the end of the year.
Tom Elsener: Hey, Zach, this is Tom Alcindor, EVP for reservoir. You know, we're proud of our well results. I think, you know, as we talked for quite some time, the Northern Delaware Basin has been a great part of the basin for us, the very high oil cuts and the low water cuts are things that we're really proud of. You know, many of the wells in the Northern Delaware Basin, they don't have as much gas and so some of them will come online with ESPs or other types of artificial lists.
As things come together, but you want to see.
Speaker 4: transcript
Speaker 4: is Congress going to come to agree with it? You'd like to think they are, but you'd rather see it happen in the same thing. You'd like to see them resolve the problems in the mid-East, but until they're resolved a little bit, or a truce, or something.
As Congress is going to come to agreement you'd like to think they are but you don't.
See it happening.
And the same thing you would like to say to resolve the problems in the mid east, but until they are resolved a little bit or truths or something.
Speaker 4: transcript
Speaker 3: you're not sure what's gonna happen. And we're better off to do those things that we know we're gonna do and plan to do them and plan to have growth, plan to meet the targets that we've already announced to you, like the 150,000, but going beyond that is probably not.
Youre not sure.
What's going to happen and we're better off to do those things that we know we're going to do and plan to do them and plan to have growth plan to meet the targets that we've already announced to you like the 150000, but going beyond that is probably not not.
Tom Elsener: When I think, you know, over the years, I think we've been a really nice job of anticipating the way these wells would behave. And I think we've made, you know, great strides in our lateral links and our targeting. You know, certainly Max Com and all of our operations team, that's had a great great role to play in that. I think our Resurongering Department has been a really nice job of anticipating the, you know, how these wells would perform.
Speaker 4: transcript
Speaker 4: and get fixed to a plan that circumstances may necessitate a change. So the outlook is very positive and that as good as 2023 is, we feel 2024 is gonna be even better in 2025 is shaping up. So I wouldn't get lost in the forest for the trees and realize that
And get fixed to a plan that circumstances mace.
Necessitate a change so.
The outlook is very positive.
That as good as 2023 is wheat field 'twenty 'twenty four is going to be even better in 2025 is shaping up so.
Tom Elsener: And so I think we've done a really nice job in that department. I'm just add second path that I do think a reservoir group led by Tanner has done a real good job. And when we've had the outside consultant, Netherlands and Sewell, they've been right on the money. And our bank engineers the same thing. There hadn't been, we've been 10% ahead. Everybody's been right on all three groups, been right on the money so we feel we have good confidence.
I wouldn't get lost in the forest for the trees and realize that.
Speaker 4: transcript
Speaker 4: whatever's happening, we've got plenty of optionality and that we have, we're gonna have production growth, we're gonna continue to reduce debt, and we're gonna have plenty of free cash flow to use as.
Uh huh.
Whatever's happening.
We've got plenty of Optionality.
And that we have we're going to have production growth, we're going to continue to reduce debt and we're going to have plenty of free cash flow to use as.
Speaker 4: transcript
Speaker 3: as the year suggests its best use. So I just encourage all of you to look at the picture and look at our record for performance and see that we've made a lot of great strides and good times and in bad times. It will be ready for whichever environment that we have and so on. describing it in presentation.
As the year.
Suggest its best use so.
I just.
Encourage all of you to look at that.
Tom Elsener: You know, we're figuring out ways to improve that profile on the well. Feel like we're drilling better wells today. Then we were even back then and feel like we're completing them better. And that the, and that the Max Com Room has kept us more in zone. And I know that may be some people hadn't seen, but our visitors that come in seem to really like the room, they can see how staying in zone longer, 10% more on a million barrel, well, can mean a hundred thousand barrels. So we, we think there's, we're glad to see the improvements.
Picture and look at our record for performance and.
And and say that we've made.
Great strides in good times and in Bad times.
We'll be ready for whichever environment.
That we have.
I think those.
Speaker 4: transcript
Speaker 4: that this I will see this is a good buying opportunity and things are headed in the right direction. Our leverage ratio is less than one so there's plenty of financial strength between whatever decision that we make on rigs and you talk about prices falling out but you could have vendor costs.
This I will say this is a good buying opportunity and things are headed in the right direction, our leverage ratio was less than one so theres plenty of financial streak between whatever decision.
That we make on rates and.
You talked about price has fallen out.
Could have vendor cost come down dramatically so.
Speaker 4: transcript
Speaker 4: come down dramatically so you even improve on what we did this year.
Tom Elsener: And we're looking for more ways to do each well better, you know, by increments got it.
Even improve on what we did this year so.
Speaker 4: transcript
Speaker 2: I think the team has proven itself and give us some time and opportunity to show how we'll make the most of these uncertain times.
<unk>.
I think the team has proven itself and give us some time and opportunity to show.
Brian Willey: Thanks guys, and then just one follow up on the cash flow statement for the quarter, there was 65 million in acquisition. You know, could you give us a little color on maybe what was acquired and, you know, quantify the production impact from, from those acquisitions. You know, you're getting probably into something that is difficult to break, break down, somewhere small, somewhere larger. It's just a whole mix of items in that kind of a stew pot where things go in, but you want to take a hand at it, Brian?
How we will make the most of these <unk>.
Certain times.
Okay.
Okay.
Thank you.
Thank you.
Our next question.
Speaker 1: transcript
Speaker 1: comes from the line of Leo Mariani of Roth MK.
Comes from the line of Leo Mariani of Ross M J M.
Speaker 2: transcript
Speaker 11: Hey guys, I wanted to touch base on a couple of numbers here.
Yes.
Hey, guys wanted to.
Based on a couple of numbers here.
Speaker 2: transcript
Speaker 11: You guys are guiding to kind of higher fourth quarter LOE.
You guys are guiding to kind of higher fourth quarter LOE.
Speaker 2: transcript
Speaker 11: Just wanted to get a sense what was sort of driving that. I'm thinking maybe that you guys are trying to finish with some of your midstream connections and kind of finish repelaming some of the advanced properties. So just wanted to get a sense if that kind of comes down when that work is finished. And on cash tax, as y'all talk to one person.
Just wanted to get a sense, what was sort of driving that I'm thinking maybe that you guys trying to finish with some of your midstream connections and kind of finished plumbing. Some of the advanced properties. So just wanted to get a sense if that kind of comes down when that work is finished.
Brian Willey: Sure, Joe, this is Brian. I'd say Joe said it very well. I think it's a mix of, you know, dozens of deals. And, you know, as we look at it, it's not off included. It's got operated wells and increasing our interest in those. It's new acreage. It's just, it's a broad mix. And so our land group, just as a tremendous job, we talked about this for many years, this brick-biberic approach of building the company in this kind of organic growth.
On cash taxes, Youll talk to 1%.
Speaker 2: transcript
Speaker 11: of pre-tax income in twenty twenty three one of the distance if you guys had a ballpark estimate on that twenty four
Pre tax income in 2023, I wanted to get a sense. If you guys had a ballpark estimate on that for 2014.
Speaker 11: transcript
Speaker 5: aliya this is glad i'll take the first one all at rob rob take the second one on cash taxes and so on elie we yeah we did we did guide uh... slightly higher for q4 uh... really
Hey, Leo this is Glenn I'll take the first one and I'll, let Rob Rob take the second one on cash taxes.
So on <unk>, Yes, we did we did guide slightly higher for Q4.
Brian Willey: And so, you know, shout out to Van and to John Tilberg and Brian Irman and the rest of the team. It does just such a good job in doing these deals and brick-biberic continuing to build our position in the Delaware Basin. I think Joe reviewed this slide earlier that talked about the number of wells and how we'd increased on that front. It also shows the acreage and how back in 2012, we had here right around 6,000 acres and now we're over 150,000 net acres. And, you know, it's just great to be able to increase and see that growth over the years. And so great, great job to the land team. Got it. Thanks guys. Thank you.
Speaker 11: transcript
Speaker 5: We have the bulk of the work that we did in order to integrate the advance assets is mostly complete. We do expect to see those efficiencies really, you know, going into 2024. Really Lee County in general has some higher op-ex, you know, because...
Really.
The <unk>.
The bulk of the work that we did in order to integrate the advanced assets is mostly complete we do expect to see those efficiencies really going into 2024.
Lee County in General has some higher opex.
Speaker 11: transcript
Speaker 5: effectively where, you know, kind of San Mateo isn't. And so, and then also the fact that really Advance had some higher LOE costs. So, we have really seen those, the LOE on a per-unit basis has flattened and, you know,
It's effectively where San Mateo isn't and so and then also the fact that really advance and had some higher LOE costs. So we have really seen that.
Those the low.
Neil Dingmann: Our next question comes from the line of Neil Dingman of truest. More than Joe and Tim, I can grab another nice quarter. Joe, my first question, maybe just a broad question on your comments a few minutes ago.
On a per unit basis has flattened.
And.
Speaker 11: transcript
Speaker 5: We'll see how things shake out with commodity prices and oil field service costs into 2024, but feel really good about 2023 and really last quarter.
Kind of we'll see we'll see how things shake out with commodity prices and oilfield service cost into 2024, but.
Feel really good about.
Joe Foran: I'm just wondering, would you suggest anything with your planned activity and decision to add an eighth rig and through production next year? Change if prices fell for various reasons or, you know, maybe if I can ask another way, I mean, how do you all view the very limited maintenance capital and production plans by many other reappees? And I love what you all are doing to create value. I'm just curious to know how you all are thinking about it.
2023.
And really last quarter.
Speaker 11: transcript
Speaker 5: you know changing that guidance and reducing it from the 525 to 575 on a per unit basis down to the 5 to 550. So anyhow, we have seen after taking over advance.
Changing that guidance.
And reducing it from the $5 25 to $5 75 on a per unit basis down to the $5 to $5 50 or so.
Anyhow, we have seen after taking over advance.
Speaker 11: transcript
Speaker 5: realizing those savings enough that even last quarter we were able to reduce our projections and and and kept those the same for for C4
Realizing those savings enough that even last quarter, we were able to reduce our projections and and and kept those.
Joe Foran: And you know, you bet the guys here, Neil, and they're all pretty strong-minded people, so I hesitate to say that my opinion reflects everybody else's. There's some pretty active discussion around what's the best way to go, but what I say is, you know, that the eighth rig, I think, is pretty firm. You know, we think that, you know, if commodity prices change, you know, it changes a buck or two, it's not even going to be material, and you know, how much do they have to change for you to even consider, because this rigs coming on to drill some specific wells that are important to our evaluating our overall acreage.
The same for Q4.
Speaker 8: transcript
Speaker 2: And Leo, this is Rob McClid, come the EVP and Chief Accounting Officer. So two things kind of moved in our favor since the last quarter. One of those, we estimated higher 2023 revenue, both because of production and price. And we had lower operating and capital cost estimates for the year, so that led to a little bit higher estimated taxable income. And thus our estimate of about a 1% cash tax.
And Leo this is Rob Macklin come the EVP and Chief Accounting Officer.
So two things kind of moved in our favor since the last quarter. One of those we estimated higher 2023 revenue both because of production and price and we had lower operating and capital cost estimates for the year.
Led to a little bit higher estimated taxable income.
That's our estimate of about a 1% cash tax payment that will make for the year.
Speaker 12: transcript
Speaker 2: payment that will make for the year. We're obviously doing everything we can to plan for that and to work on our deductions that we can to minimize our
We're obviously doing everything we can to plan for that end too.
Work on our deduction that we can to minimize our our income tax payments for 2024. There are a few things that we're still analyzing and studying in addition to the.
Speaker 12: transcript
Speaker 2: income tax payments for 2024. There are a few things that we're still analyzing and studying in addition to the plans for the year. We're also waiting for IRS guidance on the corporate alternative minimum tax, which would be a 15% book tax, but we think there are several things in the guidance that we're waiting for that we're going to be able to do better than that.
Joe Foran: And so I don't think we're, you know, at this point, seriously, thinking, well, we're going to take this rig on for a little bit, and then we may let it go. So we're later dead on our rig, so we have that optionality, but the economics of AdMec eighth rig looks pretty darn good, and I can't see us doing it unless, you know, Black Swan event. And I'd also like to thank Patterson has been a great partner in these endeavors with us, and you know, we've worked together, and they've done so well in improving the cost structure that Chris was, and Patterson had worked out this year.
The plans for the year, we're also waiting for IRS guidance on the corporate alternative minimum tax which would be at 15% book tax, but but we think there are several things in the guidance that we're waiting for that we're going to be able to do better than that.
Speaker 2: transcript
Speaker 11: Okay, that's helpful, guys. And I was also hoping to see if you guys could follow up a little bit on M&A. There's obviously been some significant deals starting the Permian here in 2023. You guys obviously did one of those with the advanced deal. How are you kind of thinking about it going forward? Do you think the focus is kind of more ground game, kind of brick by brick approach here, or do you think that there may be some larger deals that Matador could eventually be involved in?
Okay. That's helpful guys and I was also hoping if you guys can talk a little bit on M&A, there's obviously been some.
Significant deals done in the Permian here in 2023, you guys. Obviously did one of those with the advanced deal. How are you kind of thinking about it going forward do you think the focus is kind of more ground game.
Joe Foran: I see the same thing happening if prices were followed dramatically. Patterson is really good. You know, to help us be more efficient on our drilling, and in the splice, Chris, do you want to say that? Yeah, yeah, I mean, this is Chris Calvert, PVP Co. Chief Operating Officer. You know, I think Joe said, well, obviously, the value that we place on the relationship with Patterson is something that is extremely important to us, you know, the idea of the eighth rig.
Kind of brick by brick approach here or do you think that there may be some smaller deals at matador could essentially be involvement.
Well.
Speaker 4: transcript
Speaker 4: This is Joe and I emphasize that.
This is Joe.
I'd answer SaaS that.
Speaker 3: transcript
Speaker 4: It's like being in a football game. Are you going to run more or are you going to pass more? It all depends on the opportunities and how things go. We try to make sure we have enough of a ground game every year that we're going to hit our growth.
It's like being in a football game, where you're going to run more are you going to pass more it all depends on the opportunities and how things go.
We try to make sure we have enough of a ground game every year that we're going to hit our growth and.
Speaker 4: transcript
Speaker 4: production increase, cash, free cash flow increase, pay down debt, all those essentials.
For <unk>.
Production increased cash free cash flow increased pay down debt all of those essentials.
Speaker 4: transcript
Speaker 4: And on the acquisition side.
And on the acquisition side.
Speaker 4: transcript
Speaker 4: you know we tend to just be opportunistic. We don't do a lot, but you can see in our history that when we've done bills, they've been a crede for what we're trying to do and as enhanced the ground game. So we're open to acquire more of an acquire than we are a seller. And but.
Sure.
Yes.
Tend to just be opportunistic we don't do a lot, but you didnt say in our history that when we've done deals they've been accretive to what we're trying to do and.
Joe Foran: We were talking about the right time to add that in. I think the foundation under that decision or a lot of that foundation is execution, and how can this rig come help us execute our plan not only for 2024, but also to continue to drill wells in a faster way, in a more cost-efficient manner. And so you look at the relationship with Patterson that goes back decades, it is something that has been built of an understanding of, we know what our expectations are, Patterson knows.
Sure.
Has enhanced the ground game.
So we are open.
To acquire or more of an acquirer than we are a seller.
Speaker 4: transcript
Speaker 4: And so we're very open to the bind something, but we wanted to make sense. We're not trying to get bigger as much as we're trying to get better. And to acquire interest in our existing wells from people or something like that has a fit to our acreage positions or our midstream.
And.
But.
And so we're very open to.
Joe Foran: And it comes with a high-tech super spec rig. It comes with a very competent, exceptional crew. It comes with these things that really allow us to continue to execute in a way of reducing drilling days, of reducing well costs and things like that. And so the optionality obviously is very important to us, but it's also the understanding that we know what we're going to expect, and that's a high-tech super spec rig.
The buying something but we wanted to make sense, we are not trying to get bigger as much as we're trying to get better.
And to acquire interests in our existing wells from people or.
Something like that has a fit to our acreage positions or our midstream.
Speaker 4: transcript
Speaker 4: And so we're always open for deals. Van, can you comment your late guy on this?
And so.
So we're always open for deals van can.
Joe Foran: It's going to be able to drill wells like U-turns, longer laterals, things like that, that allow us to continue to improve on the operational front. One other I've added to Chris is that with Patterson, we have a long history going back 40 years that Lynn Patterson drilled my first well out there, and subsequently either Patterson or their predecessors have been the guys that drilled the wells. And what we've always done, if you look at our history, is that when times get tough and prices really go down, we don't stop drilling.
Can you <unk> laid down this.
Speaker 13: transcript
Speaker 4: Yeah, Joe, I think, you know, what you're saying is right. And I think you guys have heard this from us.
Yes, Joe I think.
What youre, saying is right and I think you guys have heard this from us.
Speaker 13: transcript
Speaker 4: for a decade or so that we're always on the lookout for good deals. We're going to.
For a decade or so.
That we're always on the lookout for good deals we're going to.
Speaker 13: transcript
Speaker 12: Make sure that we keep the balance sheet strong and when opportunities present themselves that we feel like are going to give our acreage position enhancement whether it be in existing units.
Make sure that we keep the balance sheet strong and when opportunities present themselves that we feel like are going to give our.
Acreage position enhancement, whether it be in existing units or expanding into new units.
Speaker 13: transcript
Speaker 12: We're going to take a hard look at it and if the deal is right, we'll do it.
To take a hard look at it and if the deals right.
Joe Foran: That's the times that we feel we make most progress. So I don't wish for bad prices by any means, but Patterson knows just his prices go down. We're not going to start dropping rigs like they were flies. These times we take on a rig, we've got a plan sequence of wells for them to drill that fit their... You know, their equipment and their location and so I think you'll see us even if prices go down, we're going to keep Riggs running and that's the time that we feel we make the most progress, Chris.
We will do it but.
Speaker 13: transcript
Speaker 12: I think Joe's right, we're buyers, and we're always looking.
I think Joe is right, where buyers and we're always looking.
Okay.
Thanks.
Thank you.
Our next question.
Speaker 14: transcript
Speaker 13: comes from the line of Trafford Lamar of Raymond James. Hi guys, thanks for taking my questions. The first one I have is.
It comes from the line.
Trafford Lamar of Raymond James.
Hi, guys. Thanks for taking my questions.
First one I have.
Circles around the Horseshoe wells, how does the cycle times in these wells compare to your more standard two mile laterals, just any color on that would be great.
Joe Foran: Yeah, 100% that is something that we are very proud of when we've seen some of these, you know, pricing environments where oil dips down in say, COVID times. We did make some of those best operations, operational achievements, whether it was stay line wells, you know, lateral length extensions into two and two plus mile laterals, Simon Frack, all these things were, were a function of the work that was done during a down cycle in the commodity price. And so, if we didn't have that maintained level of activity, you know, we wouldn't be talking about some of the operational prices that we have today.
Speaker 9: transcript
Speaker 9: yeah i i i tried for this is christ calbert again evp cc o you know i think cycle times when we look at these these i want always remind people these were part of a larger nine well-batched these two these two horses you was but you know from from a reference point for example looking back to a previous you know our previous record for drilling
Yes, hi.
This is Chris Calvert again, EVP co CFO.
Cycle times and when we look at these these are want to always remind people. These were part of a larger nine well batch. These two these two horseshoe wells, but.
From a reference point for example, looking back to a previous our previous record for drilling a two mile Wolfcamp a.
Speaker 9: transcript
Speaker 9: two-mile Wolf Camp A in our wolf asset area.
Speaker 9: transcript
In our Wolf asset area.
One of these horse shoes actually beat that record by about 20% from our spud to spud to TD. So.
Speaker 9: transcript
Speaker 9: You know, when you think about just cycle times, it's hard to put a number on it because it's highly dependent on the quantity of wells within the batch, but from just drilling times, completion times.
When you think about just cycle times, it's hard to put a number on it because it's highly dependent on the quantity of wells within the batch, but from just drilling times completion times.
Brian Willey: Now that all makes sense, I'll let the details and then Joe, maybe question to you Brian, just around my, my second question, you know, noting that you don't have 24 specific guidance that you mentioned, potential higher production, and I'm just wondering, given the higher production, but in the release, you guys talked about the better than expected. Do you see any capital expenditures and midstream expenditures? I'm just wondering, are you able to give some, you know, maybe gold post or some just broader issues around what maybe to spend might look like next year if you add that a three.
Speaker 9: transcript
Speaker 9: you know they're very comparable to a straight two mile lateral you know i think we we kind of like the joke the drill bed doesn't necessarily know it's drilling a u-turned-just you know with the new technologies whether it's new bit technologies and motor technologies
They're very comparable to a straight two mile lateral I think we kind of like to joke that drove it doesn't necessarily know its drilling a U turn to just with the new technologies, whether it's a new bid technologies new motor technologies.
Speaker 9: transcript
Speaker 9: We continue to go out and perform whether it's a U-turn well like we did on this or other two miles to an half and even 2.7s that we're looking to put online here in the next year. It's just always about continuing to drill fast and reduce those cycles.
We continue to go out and perform whether it's a U turn well like we did on this or other two miles two and a half and even two sevens, where we're looking to put online here in the next year. It's just always about continuing to drill faster and reduce those cycle times.
Brian Willey: Well, I just say, Neil, in February, we've announced that we'll be giving you this detail. And if it comes together earlier, we'll be happy to share it with you. Okay, okay, I would just give it, given how good the DC and EU sounds like it's continuing to go. Thank you.
Speaker 14: transcript
Speaker 13: and then just a quick one here, just to clarify, have you all already signed the contract and secured the additional 8th rig for 1Q24 or Z.
Perfect I appreciate that Chris and then just a quick one here just to clarify.
Have you already signed the contract and secure the additional eight rig for <unk> 24 is that is that happening later this quarter.
Speaker 9: transcript
Speaker 9: It's, this is Chris again. It's likely to happen here in the short term here in the next week or two, a few weeks, whatever it could be. Once again, leaning into the, and valuing the relationship with Patterson, it is right now we have an understanding that we will be adding in RIG in the first quarter of next year. You know, obviously highly predicated on the super spec capabilities of that RIG to make sure it's drilling wells in a manner that we've grown used to. And so that's kind of the story line there.
Tim Rezvan: Please stand by for a next question, which comes from the line of Tim Resan of key bank capital markets.
This is Chris again, it's likely to happen here in the short term here in the next week or two few weeks whatever it could be once again leaning into and valuing the relationship with Patterson. It is right now we have.
Glenn Stetson: Good morning folks. I wanted to circle back on gas processing one more time and try to sort of tie a bow on the issue for 2024 because it's a big debate point in the marketplace. You're ending the year with 47 wells and progress. You've committed to eight rigs and we don't expect to see a new plant operational before 2025. So as you build out your drill schedule, what level of confidence you have that every single well you're going to bring online. You will have either in house or third party processes to try to understand will that be a constraint on the program next year.
Understanding that we will be adding a rig in the first quarter of next year, you know obviously highly predicated on the super spec capabilities of that rig to make sure its drilling wells in a manner that we've that we've grown used to and so that's kind of the storyline there.
Great appreciate it thanks guys.
Thank you.
Speaker 15: transcript
Speaker 14: Our next question.
Our next question.
Speaker 1: transcript
Speaker 1: comes from the line of Kevin McCurdy, a Pickering Energy Part.
Comes from the line of Kevin Mccurdy, Pickering Energy partners.
Speaker 14: transcript
Speaker 13: Hey, good morning, Joe and team. Just just one question for me today. We noticed realize oil prices have gone back to being above WTI, both through actuals and third quarter and the guidance for fourth quarter. I wonder if you could talk about what you're seeing there that has improved over the first couple of quarters earlier this year.
Hey, good morning, Joe and team just just one question for me today.
Glenn Stetson: Hi Tim, this is Glenn Stetson, EVP production. I would say very confident. We have, you know, the way that these two businesses have worked together will a three businesses now with Pronto. You know, between the midstream and the upstream side of the business, you know, we are constantly talking to each other about our development plans and looking for, you know, looking into the future. To make sure that we have adequate capacity.
We noticed realized oil prices have gone back to being above <unk>, both through actuals in third quarter and the guidance for fourth quarter I Wonder if you could talk about what youre seeing there that has improved over the first couple of quarters earlier this year.
Speaker 7: transcript
Speaker 7: this is bright and I think Greg until three to chime in as well but you know I think just looking at the price of what I think part of it's the role as we look at this historically and just how the price is calculated and realized pricing and so that's something that we saw an impact from
Yes. This is Brian and I think Greg and feel free to chime in as well but.
Just looking at the price of oil I think part of it's the role as we've looked at this historically and just how the price is calculated and the realized pricing and so.
Glenn Stetson: So, and there's obviously multiple variables that account for that, you know, the gathering is one. The processing is another. And then, you know, how do we get gas out of the basin? And so, we, you know, we pride ourselves in having optionality. We pride ourselves on having multiple options when it comes to getting our gas out of the basin and having different options for gathering and processing. And so, we have redundancy in a lot of cases at some of our more prolific facilities where we can, you know, go, we actually have options for our gas.
It's something that we saw an impact from <unk>.
Speaker 7: transcript
Speaker 7: looking at second quarter to third quarter and even first quarter second quarter. And so I think as we look forward going into the future, I think that's a big piece of it.
Looking at second quarter to third quarter, and even first quarter second quarter, and so I think as we look forward doing.
Into the future I think that's a big piece of it is and just how the role it plays in the fact in the realized pricing.
Speaker 7: transcript
Speaker 7: and just how the role plays in effect in the realized pricing.
Speaker 7: transcript
Speaker 7: Also, I would say I think one of the big benefits we have is that a lot of marketing keeps on a very good job in
Also I'll just say I think one of the big benefits. We have is that a lot of the marketing team has done a very good job.
Speaker 7: transcript
Speaker 7: getting much of our oil on pipe. And so I think that...
Hitting much of our oil on pipe and so I think thats really significant because we are able to save cost there and be able to incur those savings everybody getting a higher realized price, but I don't know if you had anything else you wanted to add I think as far as the.
Speaker 13: transcript
Speaker 12: really significant because we are able to save a cost there and be able to incur those savings, thereby getting a higher realized price, but Vic, I don't know if you had anything else you wanted to add. Well, yeah, I think as far as the amount of oil on pipes.
Glenn Stetson: And so, Greg and Joe highlighted it earlier, you know, as we look into 2024, something that, you know, will provide some more capacity for us is this connection down to the advanced properties and southern ranger. And then, and then over to, you know, from Pronto to San Mateo to swing gas there. So, we are, you know, we are aware of all the activity that's going on in the basin. And, and again, are, you know, preparing ourselves for as many different scenarios as possible.
Speaker 12: transcript
Speaker 2: also helps, you know, versus, you know, versus being truck. It's a lot more efficient. It helps operations.
The amount of oil on pipe also helps.
Versus being trucked.
More efficient.
It helps operations.
Speaker 12: transcript
Speaker 4: well streamline that and so that's a big benefit that the vehicle has as much oil on pipe.
As will streamline and so that's a big benefit.
Being able to have as much oil on pipe.
Speaker 3: transcript
Speaker 3: I just had that yesterday we put out our sustainability report. Credit to the team that filled that together.
I would just add that yesterday, we put out our sustainability report.
I give credit to the team that built that together.
Speaker 4: transcript
Speaker 3: All right, it's in good shape. Makes for good nighttime reading. Uh-huh.
I think it's in good shape makes for good night time rating.
Speaker 4: transcript
Speaker 4: and a good reference material. So, yeah.
Uh huh.
And.
Glenn Stetson: But, but again, the strategic nature of having your midstream businesses that provide flow assurance for the upstream business. I think is unique to Mattador and certainly, you know, as somebody who's really in charge of production, it gives me a lot of comfort and, and again, confidence in our ability to execute on, you know, the plans that we put out.
And as a good reference materials so.
Speaker 3: transcript
Speaker 3: Take a look at that and we've worked hard to put more and more on pipe and to reduce our admissions by 44%.
Yeah.
Take a look at that and we've worked hard to put more and more on pipe and to reduce our emissions.
44%.
Speaker 16: transcript
Speaker 15: This is Sheli Appell and Director and former ESG coordinator. And I will say that in 2022 we had 89% of our operated produced oil on pipe. And to Joe's point, we're very, very pleased that from 2019 to 2022, we reduced our greenhouse gas intensity by 44%. So almost cutting it in half over that four-year period.
Sure. This is generally a palin.
Character and farmer, ESG coordinator and I will say that.
In 2022, we had 89% of our operated produced oil on pipe and to Joe's point, we're very very pleased that from 2019 to 2022, we reduced our greenhouse gas intensity by 44% so almost cutting it in half.
Tom Elsener: Yeah, I appreciate the comprehensive answer to the question. And then as a follow-up, I remember in the past as it related to 2023, management had talked about it as passable around year in terms of, you know, rigs being spread across your footprint. How do you think about rig allocation in 2024, you know, given the really high oil cut to the ranger, but, you know, possible gathering. Thanks up there.
That four year period.
Yeah.
Okay.
Thank you.
Speaker 1: transcript
Speaker 1: comes from Oliver Wong of TPH and Company.
Our next question.
Joe Foran: Thank you. Okay, thanks and this is Tom Elsener again. You know, I guess the way we think about it is, you know, all the different acid areas have contributed, you know, in a very meaningful, meaningful way. We've, you know, we've certainly, you know, the ranger wells, if we've talked about a little bit today, it's very proud of, you know, we have a big catch of wells coming along in an arrowhead here in the fourth quarter.
Comes from Oliver Huang of CCH <unk> company.
Good morning, all and thanks for taking my questions.
Speaker 17: transcript
Speaker 10: My first question, just with respect to the arrowhead area, no there's a significant portion of your Q4 program in New Mexico coming from there.
My first question just with respect to the Arrowhead area.
There is a significant portion of your Q4 program in new Mexico coming from there soon these wells should be online in pretty short order, but was just trying to get a better understanding on plans for getting those wells online is the thinking there is something similar to kind of a staggered nature, we saw and the Margarita wells in that advance area last quarter.
Joe Foran: And we've been in Antelope Bridge, you know, for many, you know, for many, many years. These new, of course, you wealth under the wolf area, we're, our teams are very proud of those. Russell Briggs has been making some great strides in creating, you know, two mile laterals out of some of the, the shower targets and re, reusing some of the same, you know, drilling pad and infrastructure over the last several years.
Speaker 18: transcript
Speaker 16: Oliver, thanks for the question. This is Tom Elstner again. As we usually do with large batches of wells, we typically would bring them online in some sort of staggered fashion. Some of the wells could use artificial lift at varying times, but again, this is something we've historically done all throughout the Basin, whether that's...
This is Oliver thanks for the question. This is Tom Elsner again.
As we usually do with a large batches of wells, we typically would bring them online and some sort of staggered staggered fashion.
Joe Foran: And so, you know, I do, I do think we'll probably spread the ball around, but it's, you know, it's too early road to get into those details today. But certainly all of our teams are contributing in a very meaningful way. Yeah. And I just would add that I understand you'd like to have all these numbers in detail today, but it's not in our best interest to do so with all the volatility and the options are, we'll have them for you.
Some of the wells could use artificial lift.
Times.
But again.
It's something we've historically done.
All throughout the basin and whether Thats.
Speaker 18: transcript
Speaker 16: you know, stay aligned or Rodney or any other other kind of archbatches of wells. We're very excited for these wells. This is an area that, you know, we've been building up to for many years, getting these targets ready, making sure that, you know, same as, you know, the team are up there. And so I know, you know, Glyn and the team are excited to get these wells up and running.
Stateline Rodney or any other are there kind of kind of large batches of wells. We're very excited for these wells. This is an area that.
We've been building up Q4 for many years getting giving you targets ready, making sure that.
Matteo and the team are up there.
And so I know Glen and the team are excited to get these wells up and running.
Joe Foran: It's just the time and it didn't fall on today. We may have them by the end of the year, but as things come together, but you want to see is Congress going to come to agree, but you'd like to think they are, but you don't, you'd rather see it happening in the same thing. You'd like to see them resolve the problems in the Middle East, but until they're resolved a little bit, or a truce or something, you're, you're not sure what's going to happen.
Speaker 11: transcript
Speaker 5: Yeah, all over the Glen. I just add that the 17 wells are going to come in at different times. And they're actually on different development units and delivered to different facilities. And so a little bit different than the advanced situation where he had 21 wells going to one facility. But Tom, just what Tom said was.
Yes, Oliver this is Glenn I would just I'd just add that the 17 wells are.
We are going to come in at different times and they are actually on on different <unk>.
Development units and deliver to different facilities and so.
A little bit different than than the advance situation, where we had 21 wells go into to one facility, but but Tom just what Tom said was that.
Speaker 11: transcript
Speaker 5: is exactly accurate and we'll bring them on you know a few at a time.
It is exactly accurate.
We'll bring them on.
Joe Foran: And we're better off to do those things that we know we're going to do and plan to do them and plan to have growth, plan to meet the targets that we've already announced to you, like the 150,000, but going beyond that is probably not, not and get fixed to a plan that circumstances may necessitate a change. So the outlook is very positive and that as good as 2023 is, we feel 2024 is going to be even better in 2025 is shaping up.
Speaker 11: transcript
Speaker 5: and then, you know, they're all delivering to Samataya, oil gas and water, so we'll help bolster volumes there.
A few at a time.
Then there are all delivering to San Mateo oil gas and water. So we'll help bolster volumes there.
Awesome Thats helpful and just for a second question I know in the past you all have called out activity or even certain pads.
Speaker 17: transcript
Speaker 17: And just for a second question, I know in the past you all have called out activity or even certain paths that might require incremental downtime or shut-ins.
My require incremental downtime or shut ins.
Just kind of thinking about this next batch of 20 or so wells in the advance area. In early 2024 are we going to need to see some of the recently online Margarita wells, either being curtailed or shut in when those come online on the backdrop of I guess tighter infrastructure not sure. If the next set of wells.
Speaker 17: transcript
Speaker 17: or shut in when those come online on the backdrop of I guess tighter infrastructure, not sure.
Joe Foran: So I wouldn't get lost in the forest for the trees and realize that whatever is happening, we've, we've got plenty of optionality and that we have, we're going to have production growth, we're going to continue to reduce that and we're going to have plenty of free cash flow to use as as the year suggests its best use. So I just encourage all of you to look at the picture and look at our record for performance and see that we've made a lot of great strides in good times and in bad times.
Fair enough and proximity within Ranger to where such impacts might be deemed relatively minimal, but really just trying to understand that dynamic as well as we enter next year.
Speaker 11: transcript
Speaker 5: Oliver, this is Glenn again. The short answer is no. We, the Dagger Lake South development of those, the further, the additional 21 wells are not in proximity to the Margarita Wells. And so the nature of shutting in wells for offset frack protection won't be a situation on this particular development.
Oliver This is Glenn again, the short answer is no.
The dagger Lake South development of those the further the additional 21 wells are not in proximity to the Margarita wells.
And so that the the nature of shutting in wells for offset Frac protection wont be a situation on on this particular development.
Joe Foran: And we'll be ready for whichever environment that we have. And so, you know, I think those that do so will see this as a good buying opportunity and things are headed in the right direction. Our leverage ratio is less than one. So there's plenty of financial strength between whatever decision that we make on rigs. And you talked about prices falling out, but you could have vendor costs come down dramatically. So you even improve on what we did this year. So I think the team has proven itself and give us some time and opportunity to show how we'll make the most of these uncertain times. Thank you.
Awesome, Thanks for the time.
Okay.
Speaker 1: transcript
Speaker 1: Thank you ladies and gentlemen. This ends the Q&A portion of this morning's conference call. I like to turn the call over to management for any closing remarks.
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.
Speaker 4: transcript
Speaker 4: Well, thanks to everyone for their time and attention in this. And, uh, uh,
Well, thanks, everyone for their time and attention in this and.
Speaker 4: transcript
Speaker 4: I would like to emphasize the fundamentals.
I would like to emphasize the fundamentals.
Speaker 4: transcript
Speaker 4: I've said it once already, we started the year at 100,000 barrels, we're going to end the year not just at 140,000 but at 145,000 barrels, that's a 40-45% growth and meanwhile we reduced the debt over $200 million from this while we were keeping those rigs.
Sure.
That said it once already.
We started the year at a 100000 barrels we're going to end the year not just at 140 to 145000 barrels that's a 40% 45%.
Growth and Meanwhile, we reduced the debt over 200 million.
From this Huawei.
Speaker 4: transcript
Speaker 4: busy and bring those wells online. In addition, Glenn reduced LLE expenses.
And those rigs busy and bringing those wells online.
Leo Mariani: Our next question comes from the line of Leo Mariani of Roth MKM. Hey guys, wanted to touch based on a couple of numbers here. You guys are guiding to kind of higher fourth quarter, L.O.E. Just wanted to get a sense what was sort of driving that. I'm thinking maybe that you guys are trying to finish with some of your midstream connections and kind of finish re-plumbing some of the advanced properties. So just wanted to get a sense if that kind of comes down when that work is finished.
In addition, Glen reduced.
Speaker 4: transcript
Speaker 4: Through time we reduced our drilling cost for foot in a time of rising service cost and We've continued to build out the midstream
LOE expenses.
The third time, we reduced our drilling.
Cost per foot.
And at time of rising.
Service cost.
And.
We've continued to build out the midstream.
Speaker 4: transcript
Speaker 4: opportunities, improved ESG. So I think it's been a really good year to this point and a really good quarter and as
Opportunities.
Proved.
<unk>. So I think it's been a really good year to this point and a really good quarter.
And.
Leo Mariani: And on cash taxes, you'll talk to 1% of pre-tax income in 2023. Wanted to get a sense if you guys had a ballpark estimate on that for 24. Hey, Leo, this is Glenn. I'll take the first one. I'll let Rob take the second one on cash taxes. So on L.O.E., yeah, we did guide slightly higher for Q4. Really, we owed the bulk of the work that we did in order to integrate the advanced assets is mostly complete.
Speaker 4: transcript
Speaker 4: you know the stock is off during trading uh... admit
As.
Even though the stock is off during <unk>.
Speaker 3: transcript
Speaker 4: but it's a buying opportunity. And I've never sold single share of my stock during the 12 years that we've been publishing.
I admit.
But it's a buying opportunity.
And I've never sold a single share of <unk> stock.
During the 12 years that we've been public and so have most of the other officers and if you look at it we're buyers of stock.
Speaker 4: transcript
Speaker 2: and so have most of the other officers and if you look at it, we're bars of stock.
Speaker 4: transcript
Speaker 4: and not sellers and which have great participation from our staff. I think anybody buys at this point is going to be real pleased with the final year's outcome. And I can understand you would like to have numbers exact as we think things are going to be. But that's not a long term.
And not sellers and which.
And have great participation from our our staff I think anybody buys at this point is going to be real pleased with the final years of outcome and I can understand you would like to have us have numbers exact as we think things are going to be but that's not fair.
Leo Mariani: We do expect to see those efficiencies really, you know, going into 2024. Really Lee County in general has some higher op-ex, you know, because it's effectively where, you know, kind of same Mateo isn't. And so, and then also the fact that really advanced had some higher L.O.E, cost. So we have really seen those, the L.O.E, on a per unit basis has flattened. And, you know, kind of we'll see how things shake out with commodity prices and oil-field service costs into 2024.
Long term right thing to do nor is it prudent in a time of such volatility.
Speaker 4: transcript
Speaker 4: right thing to do, nor is it prudent in a time of such volatility. We can tell you that we're going to be profitable. We're going to keep that leverage ratio less than one, unless some spectacular opportunity shows itself. But every moment is to keep the balance sheet strong, production growing, cost coming down, and continued good execution.
Can tell you that we're going to be profitable, we're going to keep that leverage ratio less than one unless some spectacular opportunity shows itself that ever.
Every moment is to keep the balance sheet strong.
Production growing costs coming down.
And continued good execution.
Leo Mariani: But, you know, feel really good about 2023 and really last quarter, you know, changing that guidance and reducing it from the 525 to 575 on a per unit basis down to the 5 to 550. So anyhow, we have seen after taking over advance realizing those savings enough that even last quarter we were able to reduce our projections and kept those the same for Q4. And Leo, this is Rob McClid, I'm the EVP and Chief Accounting Officer.
Speaker 4: transcript
Speaker 4: We think midstream enhances our opportunity. Is that assures us of flow assurance. And as I often said to people on the road, that if you're going to be a cotton farmer in Dawson County, you need down part of the cotton gin. The midstream persists at same deal. If you want to get your cotton processed.
Uh huh.
We think midstream enhances our opportunity as it assures us of.
Flow assurance and as I've, often said to people on the road.
If youre going to be a cotton farmer in Dawson County, you need down part of the cotton Jan the midstream furnishes that same deal. If you wanted to get your card and processed.
Speaker 4: transcript
Speaker 4: properly on the part of the cotton jam and we think that midstream is come in to deliver efficiencies and predictability to what we're
Properly.
Part of the Cotton Shan and we think that midstream has come in.
To deliver efficiencies and predictability to what were.
Speaker 4: transcript
Speaker 3: what we're doing. So we haven't missed on anything. We just had to have a detail for you. And that's coming, but we can't.
What we're doing so we have missed on anything we just head to head in detail for you and Thats coming.
Leo Mariani: So two things kind of moved in our favor since the last quarter. One of those we estimated higher 2023 revenue, both because of production and price. And we had lower operating and capital cost estimates for the year. So that led to a little bit higher estimated taxable income. And that thus our estimate of about a 1% cash tax payment that will make for the year. We're obviously doing everything we can to plan for that and to work on our deductions that we can to minimize our income tax payments.
Speaker 4: transcript
Speaker 4: do it with full confidence and tell thanks that'll down a little bit. Take another look at the fundamentals and come see us. We invite all of you if you want a more third discussion and more time with our senior people come see us. We'll set you up and make sure you leave with...
But we can't.
Do it with full confidence until things settle down a little bit.
I can never look at the fundamentals and come see us we invite all of you. If you want a more thorough discussion and more time.
With our senior people come see us will set you up and make sure you leave with Europe.
Speaker 4: transcript
Speaker 4: You're all your questions answered that we're allowed to under the SEC rules. We play a straight game, but we're happy to go in further detail on your questions if you can make it here. And we'd like to get to know y'all better. But I think you see that we have strength in area here.
All your questions answered that we're allowed to under the FCC rules, we play a strike gain but we're happy to go in further detail.
Leo Mariani: For 2024, there are a few things that we're still analyzing and studying in addition to the plans for the year. We're also waiting for IRS guidance on the corporate alternative minimum tax, which would be a 15% book tax, but we think there are several things in the guidance that we're waiting for that we're going to be able to do better than that. Okay, that's helpful guys.
On your questions. If you can make it here and we'd like to get to know you all better.
But I think you can say that we have strength in areas.
Speaker 4: transcript
Speaker 4: Our properties are getting better, our people are getting better, and the outlook continues to get better. So that's what I'd like to...
Our properties are getting better our people are getting better.
And.
The outlook continues to get better so that's what I'd like to end.
Speaker 4: transcript
Speaker 4: end on with an personal invitation to come see us. Who I didn't get speak today is Ned, our head of our G.S. science group, and Valid for them on working with the acreage that we have, the number of locations in the inventory continues to grow 10, 15, 20 years out that we see that coming and their work in staying in sound, all contribute to these.
<unk>.
With a personal invitation to come see us who I didn't get.
Leo Mariani: And I was also hoping to see if you guys could follow up a little bit on M&A. There's obviously been some significant deals done in the Permian here in 2023. You guys obviously did one of those with the advanced deal. How are you kind of thinking about it going forward?
<unk> today is that our head of our Geoscience group and the outlook for them on working with the acreage we have.
Half the number of locations in the inventory continues to grow.
10, 15 20 years out.
Joe Foran: You think the focus is kind of more ground game, you know, kind of break by break approach here, or do you think that there may be some some larger deals that Matador could eventually be involved? Well, this is Joe. And I'd emphasize that it's like being in a football game. Are you going to run more? Are you going to pass more? It all depends on the opportunities and how things go. We try to make sure we have enough of a ground game every year that we're going to hit our growth and production increase, cash, free cash flow increase, pay down debt to all those essentials.
We see that Xiaomi and there.
Work and staying in zone all contributed to these good results. So we wouldn't have raised dividends if.
Speaker 4: transcript
Speaker 4: good results. So we wouldn't have raised dividends if we thought our future...
We thought our future was weak.
Speaker 4: transcript
Speaker 4: And we wouldn't have gotten the increase in our reserve-based loans that we did from the banks unless they saw that we had plenty of reserves and inventory and we're headed in the right direction financially.
And.
We wouldn't have gotten the increase in our reserve base loans that we did from the banks unless I saw that we had plenty of.
Reserves and inventory and we're headed in a right direction financially.
Speaker 4: transcript
Speaker 4: So with that, I'd like to thank you again for your time and attention and tell you we look forward to getting with you.
So with that I'd like to thank you again for your time and attention and we.
We look forward to getting with you.
We look forward to getting with you.
Speaker 4: transcript
Speaker 3: The next time we'll have more detail.
The next time, we'll have more detail.
Speaker 4: transcript
Speaker 4: but we're going to still maintain our flexibility and options because at our size, we think one of our strengths is trying to be nimble enough to take advantage of opportunity as they come up rather than trying to give a five year.
But we're going to still maintain our flexibility and options because at our size. We think one of our strengths is trying to be nimble enough to take advantage of opportunities as they come up rather than trying to give a five year <unk>.
Joe Foran: And on the acquisition side, you know, we tend to just be optimistic. We don't do a lot, but you can see in our history that when we've done deals, they've been a creative to what we're trying to do and as enhanced the ground game. So we're open to acquire or more of an acquire than we are a seller and but and so we're very open to the buying something, but we wanted to make sense.
Speaker 4: transcript
Speaker 4: Outlook to must change the curse and What served as well is being a
Too much change occurs.
And what served us well is being able to.
Speaker 4: transcript
Speaker 4: adapt the changing circumstances. So come see us. This is a great team and great properties and we'll go into greater depth.
Adapt to changing circumstances, so come see.
This is a great team and great properties and <unk>.
And we will we will go into greater depths.
Thanks.
Speaker 1: transcript
Speaker 1: Ladies and gentlemen, thank you for your participation today. This concludes today's program.
Ladies and gentlemen, thank you for your participation today. This concludes today's program.
Joe Foran: We're not trying to get bigger as much as we're trying to get better and to acquire interest in our existing wells from people or something like that has a fit to our acreage positions or our midstream. And so we're always open for deals.
Speaker 19: transcript
Speaker 18: &
Okay.
Okay.
Yes.
Okay.
Okay.
Sure.
Okay.
Okay.
Van Singleton: Van, can you comment, you're our lead guy on this. Yeah, Joe, I think, you know, what you're saying is right. And I think you guys have heard this from us for a decade or so, that we're always on the lookout for good deals. We're going to make sure that we keep the balance sheet strong. And when opportunities present themselves that we feel like are going to give our acreage position enhancement, whether it be in existing units, or expanding into new units. We're going to take a hard look at it. And if the deal's right, we'll do it. But I think Joe's right. We're buyers. And we're always looking.
Okay.
Okay.
Okay.
Okay.
Unknown Executive: Thanks.
Trafford Lamar: Thank you.
Yes.
Okay.
Yes.
Yes.
Yes.
Trafford Lamar: Our next question comes from the line of Trafford Lamar of Raymond James. Hi, guys. Thanks for taking my questions.
Chris Calvert: The first one I have circles around the horseshoe wells. How did the cycle times in these wells compare to your more standard two mile ladders? Any color on that be great. Yeah, hi, Trafford. This is Chris Calvert. Again, even because you know, I think cycle times when we look at these, I want to always remind people, these were part of a larger nine well batch. These two, these two horseshoe wells. But, you know, from a reference point, for example, looking back to a previous, you know, our previous record for drilling a two mile wolf camp A in our wolf asset area.
Chris Calvert: You know, one of these horseshoes actually beat that record by about 20% from a spud to a spud to TD. So, you know, when you think about just cycle times, it's hard to put a number on it because it's highly dependent on the quantity of wells within the batch. But from just drilling times completion times, you know, they're very comparable to a straight two mile lateral. You know, I think we kind of like to joke the drill bed doesn't necessarily know it's drilling a U turn to just, you know, with the new technologies, whether it's new bit technologies, new motor technologies.
Chris Calvert: We continue to go out and perform whether it's a U turn well like we did on this or or other two miles to an half and even 2.7s that were looking to put online here in the next year. It's just always about continuing to drill fast and reduce those cycle times. Perfect. I appreciate that Chris.
Chris Calvert: And then just a quick one here just to clarify, have you all already signed the contract and secured the additional a break for 1 to 24 or is that is that happening later this quarter? This is Chris again. It's likely to happen here in the short term here in the next week or two, few weeks, whatever it could be. Once again, leaning into the and valuing the relationship with Patterson, it is right now we have an understanding that we will be adding in rig in the first quarter of next year.
Chris Calvert: You know, obviously highly predicated on the super spec capabilities of that rig to make sure it's drilling wells in a manner that we've grown used to. And so that's kind of the storyline there. Great. Appreciate it. Thanks, guys. Thank you.
Kevin MacCurdy: Next question, comes from the line of Kevin MacCurdy, of Pickering Energy Partners.
Brian Willey: Any good morning, Joe and team, just one question for me today. We notice realized all prices have gone back to being above WTI, both through actuals and third quarter and the guidance to fourth quarter. I wonder if you could talk about what you're seeing there that has improved over the first couple quarters earlier this year. Yeah, this is Brian and I think Gregg until three to chime in as well, but you know, I think just looking at the price, but I think part of it's the role as we've looked at this historically and just how the price has calculated and the realized pricing.
Brian Willey: And so that's something that we saw an impact from looking at second quarter to third quarter and even first quarter second quarter. And so I think as we look forward going into the future, I think that's a big piece of it. And just how the role plays an effect in the realized pricing. Also, I'll just say I think one of the big benefits we have is that a lot of the marketing teams done a very good job in getting much of our oil on pipe.
Brian Willey: And so I think that's really significant because we are able to save a cost there and be able to incur the savings there by getting a higher realized price. But I don't know if you got anything else you want to add. Well, yeah, I think as far as the amount of oil on pipe also helps, you know, versus, you know, versus being truck. It's a lot more efficient. It helps operations as well, streamline that. And so that's a big benefit to be able to have as much oil on pipe as we do.
Shelley Appel: I just add that yesterday we put out our sustainability report. I give credit to the team that filled that together. I think it's in good shape. Makes for a good nighttime reading. And in a good reference material. So, you know, take a look at that. And we've worked hard to put more and more on pipe and to reduce our emissions by 44%.
Shelley Appel: Sure, this is Shalia Pell and Director and former ESG coordinator. And I will say that in 2022 we had 89% of our operated produced oil on pipe. And to Joe's point, we're very, very pleased that from 2019 to 2022, we reduced our greenhouse gas intensity by 44%. So almost cutting it in half over that four year period. Thank you.
Oliver Wong: Next question comes from Oliver Wong of TPH in company. Good morning all. And thanks for taking my questions. My first question just with respect to the arrowhead area. No, there's a significant portion of your Q4 program in New Mexico coming from there. Soon, these wells should be online in pretty short. Order, but was just trying to get a better understanding on plans for getting those lows online. Is this thinking there is something similar to kind of the stagger nature we saw as the Margarita Wells in that advanced area last quarter?
Oliver Wong: This is Oliver, thanks for the questions. This is Tom Elsener again, you know, as we usually do with with large batches of wells, we typically would bring them online in some sort of staggered staggered fashion. Some of the wells could use artificial lift, you know, very in times. But, you know, again, we've done, you know, all throughout the basin, whether that's, you know, Stalein or Rodney or any other other kind of archbatches of wells.
Oliver Wong: We're very excited for these wells. This is an area that, you know, we've been building up to for many years, getting these targets ready, making sure that, you know, same as Teo and the team are up there, as I know, you know, Glenn and the team are excited to get these wells up and running. Yeah, Oliver, this is Glenn. I just add that the 17 wells are going to come in at different times and they're actually on different development units and delivered to different facilities.
Oliver Wong: And so, a little bit different than the advanced situation where he had 21 wells going to one facility, but Tom, just what Tom said was exactly accurate. We'll bring them on, you know, a few at a time. And then, you know, they're all delivering to San Mateo, oil gas and water, so we'll help bolster volumes there. Awesome, that's helpful. And just for a second question, I know in the past, you all have called out activity or even certain paths that might require incremental downtime or shut-ins.
Oliver Wong: So, I'm just kind of thinking about this next batch of 20 or so wells in the advanced area in early 2024. Are we going to need to see some of the recently online Margarita wells either being curtailed or shut-in when those come online on the backdrop of, I guess, tighter infrastructure. Not sure if the next set of wells is far enough in proximity within Ranger to where such impacts might be deemed relatively minimal.
Oliver Wong: But I really just try to understand that dynamic as well as we enter next year. Oliver, this is Glenn again. The short answer is no. The dagger-like south development of the additional 21 wells are not in proximity to the Margarita wells. And so the nature of shutting in wells for offset-fract protection won't be a situation on this particular development. Awesome, thanks for the time.
Tom Elsener: Thank you, ladies and gentlemen. This ends the Q&A portion of this morning's conference call.
Glenn Stetson: I'd like to turn the call over to management for any closing remarks. Well, thanks to everyone for their time and attention in this. And I would like to emphasize the fundamentals. I've said it once already, we started the year at 100,000 barrels, we're going to end the year, not just at 140, but 145,000 barrels, that's a 40, 45% growth, and meanwhile we reduced the debt over 200 million from this, while we were keeping those rigs busy and bringing those wells online.
Glenn Stetson: Not in addition, Glenn reduced LLE expenses, through time we reduced our grilling cost per foot in a time of rising service cost, and we've continued to build out the midstream opportunities, improved ESG. So I think it's been a really good year to this point and a really good quarter, and as you know the stock is off during trading, I admit, but it's a buying opportunity, and I've never sold single share of my stock during the 12 years that we've been public.
Glenn Stetson: And so have most of the other officers, and if you look at it, we're buyers of stock and not sellers, and which have great participation from our staff. We can tell you that we're going to be profitable, we're going to keep that leverage ratio less than one, unless some spectacular opportunity shows itself. That ever moment is to keep the balance sheet strong, production growing, cost coming down, and continued good execution. We think midstream enhances our opportunity, as it assures us of flow assurance, and as I often said to people on the road, that if you're going to be a cotton farmer in Dawson County, you need down part of the cotton jam.
Glenn Stetson: The midstream purses that same deal, if you want to get your cotton processed properly on the cotton jam, and we think that midstream is come in to deliver efficiencies and predictability to what we're doing. We haven't missed on anything, we just had to have a detail for you, and that's coming, but we can't do it with full confidence until things settle down a little bit. Take another look at the fundamentals, and come see us, we invite all of you, if you want a more third discussion and more time with our senior people, come see us, we'll set you up and make sure you leave with all your questions answered that we're allowed to under the SEC rules.
Glenn Stetson: We play a straight game, but we're happy to go in further detail on your questions if you can make it here, and we'd like to get to know you all better, but I think you see that we have strengthened area here. Our properties are getting better, our people are getting better, and you know the outlook continues to get better.
Joe Foran: So that's what I'd like to end on with an personal invitation to come see us.
Joe Foran: Who I didn't get speak today is Ned, our head of our G.S. Science Group, and the outlook for them on working with the acreage of it that we have, the number of locations in the inventory continues to grow. You know, 10, 15, 20 years out that we see that coming, and their work and staying in sound all contribute to these good results. So we wouldn't have raised dividends if we thought our future was weak, and we wouldn't have gotten the increase in our reserve-based loans that we did from the banks unless they saw that we had plenty of. Reserves an inventory, and we're headed in a right direction financially.
Joe Foran: So with that, I'd like to thank you again for your time and attention, and today we look forward to getting with you. The next time we'll have more detail, but we're going to still maintain our flexibility and options because at our size, we think one of our strengths is trying to be nimble enough to take advantage of it. As they come up, rather than trying to give a five-year outlook, to much change occurs, and what served us well is being able to adapt the changing circumstances. So come see us. This is a great team, and great properties, and we'll go into greater depth. Thanks.
Unknown Executive: Ladies and gentlemen, thank you for your participation today.
Unknown Executive: This concludes today's program.
Unknown Executive: Thank you.