Q1 2024 Matador Resources Co Earnings Call
Operator: Good morning, ladies and gentlemen, welcome to the first quarter 2024 Matador Resources Company earnings conference call. My name is Daniel, 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. 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. I will now turn the call over to Mr. Mac Schmitz, Senior Vice President, Investor Relations for Meta. Mr. Schmitz, you may proceed. Thank you, Daniel.
Good morning, ladies and gentlemen.
Welcome to the first quarter 2020 for Matador Resources Company earnings Conference call.
Daniel: My name is Daniel and I'll be serving as the operator for today.
Daniel: This time, all participants are in a listen only mode.
Daniel: We will facilitate a question and answer session at the end of the Companys remarks.
Daniel: 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.
Daniel: Discussed in the company's earnings press release issued yesterday.
Daniel: I will now turn the call over to Mr. Mac Schmitz Senior Vice President Investor Relations for Matador. Mr. Schmitz you May proceed.
Mac Schmitz: Thank you, Daniel. And good morning, everyone.
Mac Schmitz: Thank you Daniel.
Mac Schmitz: Good morning to everyone and thank you for joining us for Matadors first quarter 2024 earnings conference call.
Mac Schmitz: And thank you for joining us for Matador's first quarter 2024 earnings conference. Some of the presenters today will reference certain non-GAAP financial measures regularly used by Matador Resources in measuring the company's financial performance. Reconciliations of such non-GAAP financial measures with comparable financial measures calculated in accordance with GAAP are contained at the end of the company's earnings press release. As a reminder, certain statements included in this 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.
Mac Schmitz: One of the presenters today will reference certain non-GAAP financial measures regularly used by Matador resources in measuring the Companys financial performance.
Mac Schmitz: Conciliation of such non-GAAP financial measures with comparable financial measures calculated in accordance with GAAP are contained at the end of the company's earnings press release.
Mac Schmitz: As a reminder, certain statements included in this mornings presentation, maybe forward looking and reflect the company's current expectations or forecasts.
Mac Schmitz: Future events based on information that is now available.
Mac Schmitz: Actual results and future events could differ materially from those anticipated in such statements. Additional information concerning factors that could cause actual results to differ materially is contained in the company's earnings release and its most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-K.
Mac Schmitz: Actual results and future events could differ materially from those anticipated in such statements.
Mac Schmitz: Additional 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.
Mac Schmitz: In addition to this morning's earnings press release, I would like to remind everyone that you can find a slide presentation in connection with the first quarter 2024 earnings release under the investor relations tab on our corporate website. And with that, I would now like to turn the call over to Mr. Joe Foran, our Founder, Chairman, and CEO. Joe. Thank you.
Speaker Change: And in addition to this morning's earnings press release, I would like to remind everyone that you can find a slide presentation in connection with the first quarter 2024 earnings release under the Investor Relations tab on our corporate website.
Speaker Change: With that I would now like to turn the call over to Mr. Joe Foran, our founder Chairman and CEO Joe.
Joseph Wm. Foran: Thank you Mac.
Joseph Wm. Foran: Right.
Joseph Wm. Foran: Try to be brief and to the point, but obviously, the quarter is off to a good start. We're really pleased and believe or are confident that the next quarter will be even better. We now have the connectors in place and functioning, so you have 595 miles of pipeline there at work, which is enhanced by being in one system.
Joseph Wm. Foran: We'll try to be brief and to the point.
Joseph Wm. Foran: But.
Joseph Wm. Foran: Obviously the quarter is off to a good start.
Joseph Wm. Foran: Really pleased.
Joseph Wm. Foran: <unk>.
Joseph Wm. Foran: Believe or confident that next quarter will be even better.
Joseph Wm. Foran: We now have the connectors.
Joseph Wm. Foran: Placed in functionally.
Joseph Wm. Foran: We have 595 miles of pipeline.
Joseph Wm. Foran: Their work is enhanced by being in one system.
Joseph Wm. Foran: Second.
Joseph Wm. Foran: We've, by doing so, we've increased our flow assurance, and only increased flow assurance at the same time we improved our balance sheet by recently having three transactions. We amended the credit agreement to extend out to 2029, five years, and increased the committed amount from $1.325 billion to $1.5 billion with room to go up from there on the basis of our barring base.
Joseph Wm. Foran: The waived by doing so.
Joseph Wm. Foran: We've increased our flow assurance.
Joseph Wm. Foran: And the only increased flow assurance at the same time, we improved our balance sheet.
Joseph Wm. Foran: Recently.
Great transactions, we amended the credit agreement.
Joseph Wm. Foran: Extend out to 2025 years and increased the committed amount.
Joseph Wm. Foran: From 1.325 billion to $1 5 billion.
Joseph Wm. Foran: With room to go up from there on the basis of our.
Joseph Wm. Foran: And that's important because think about it for a moment that 19 different credit committees among our 19, banks, said that we had the financial strength to do that. And then 19 different reservoir groups reviewed our assets and said they were in support of not only the amounts that are billions and a half, but we could go higher than that. And this This, what we call the triple crayon, was Triple Crown was supported. Bye. Both are old and new.
Joseph Wm. Foran: Borrowing base.
Joseph Wm. Foran: And thats important because think about it for a moment that 19 different credit committees among car 19.
Joseph Wm. Foran: Thanks.
Joseph Wm. Foran: Said that we have the financial strength to do that and then 19 different reservoir grades reviewed our assets and say that we're in support of not only the amounts at a billion and half, but we could go higher than that.
Joseph Wm. Foran: In this.
Joseph Wm. Foran: What we call the triple Crayon.
Joseph Wm. Foran: Yes.
Joseph Wm. Foran: Right.
Joseph Wm. Foran: Sure.
Joseph Wm. Foran: Triple Crown was supported.
Joseph Wm. Foran: Both our old and there is.
Joseph Wm. Foran: New Banks, and it's in place. And then the last thing, yes, I'm pleased to report that we're going to turn on a record number of wells this quarter. There will be 43 gross operated wells, and 36.2 net wells.
Lead banks and at the same place.
Joseph Wm. Foran: And is available not that we plan to spend days had lately or anything else, but it indicates that financial strength that we can look for future quarters.
Joseph Wm. Foran: And then the last thing he is pleased to report that we're getting return on a record number of wells this quarter there'll be 43 gross <unk>.
Joseph Wm. Foran: Operating wells and 36, two net wells so.
Joseph Wm. Foran: So I look forward to answering your questions today, but I also look forward to coming back in 90 days and indicating what we've done to improve the asset base of Matador. So with that, I turn it back to you, Mac, and whatever questions that are on the line.
Speaker Change: I look forward to answering your questions today, but also look forward to coming back in 90 days and indicating what we've done to improve the asset base of Matador.
Speaker Change: So with that asset.
Speaker Change: Turn it back.
Matt: Matt Yes, whatever question.
Mac Schmitz: Thanks, Joe. Daniel, we're ready for questions. Thank you. Thank you. To ask a question, please.
Matt: Yeah.
Speaker Change: That's all.
Speaker Change: That are on the line great. Thanks, Thanks, Joe Daniel we're ready for questions. Thank you.
Operator: Thank you. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 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 please limit yourself to one question and a follow-up until all have had a chance to ask a question, after which we would welcome additional questions from. One moment for our first question. Our first question comes from Scott Hanold with RBC Capital Markets. Your line is open.
Thank you.
Speaker Change: To ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Speaker Change: Ladies and gentlemen, due to time constraints, we ask that you. Please limit yourself to one question and one follow up.
Speaker Change: Again, we ask that you. Please limit yourself to one question and a follow up until all had a chance to ask a question after which we would welcome additional questions from.
Speaker Change: One moment for your first question.
Speaker Change: Our first question comes from Scott Hanold with RBC capital markets. Your line is open.
Scott Hanold: Hey, thanks. Good morning, y'all.
Scott Hanold: Hey, Thanks, Good morning, you all.
Scott Hanold: You know, look, brick by brick M&A has been a staple of your strategy, I think, since the inception. And I've got sort of a couple of questions, but like, how do you see the current market opportunities in terms of price and quality out there right now? And as you go forward, can you talk about the mix, like how you see the economics of, you know, both organic and inorganic growth? And then, finally, could you give us some color and what you think your financial capacity is to do more M&A at this point?
Scott Hanold: Look.
Scott Hanold: By brick M&A has been a staple of your strategy I think since the inception.
Scott Hanold: And I've got sort of a.
Scott Hanold: Couple of part question, but like how do you see the current market opportunities in terms of pricing quality out there right now and as you go forward can you talk about the mix like how you see the economics of both organic and inorganic growth and then finally, if you could give us some color on what you think your.
Scott Hanold: Our financial capacity is to do more M&A at this point.
Joseph Wm. Foran: Well, let me take that. In order, you know, the first question is, we're happy to go either way on either growing organically, as we've mainly done in this Matador has grown primarily organically, but we're also prepared to go by acquisition, depending on whatever the industry and the economy are giving us. There are times when it's better to do one or the other, much like us. Football team has a passing game and a running game. And if you look back, we now have, I think, some 68 wells that have been drilled on the state line acreage.
Scott Hanold: Yes.
Scott Hanold: Well let.
Speaker Change: Let me take that in.
Speaker Change: In order.
Speaker Change: The first question is.
Speaker Change: We.
Speaker Change: We're happy to go either way on either growing organically as we mainly done in this matador has grown primarily.
Organically, but also we're prepared to go by acquisition, depending on whatever the industry and the.
Speaker Change: Economy is giving us is that their times.
Speaker Change: When it's better.
Speaker Change: Can do one or the other much lacker football team has a passing game in our running game and if you look back we have now I think some like 68 wells.
Speaker Change: Wells that have been drilled.
Speaker Change: On the Stateline acreage.
Joseph Wm. Foran: 62 currently producing, and then 6 more this quarter.
Speaker Change: Yes, 62 currently producing and then six more this quarter alright, so safety eight wells, but when we bought that our stock took a big hit because people didn't believe we pay that much.
Joseph Wm. Foran: All right, so 68 wells. But when we bought that, our stock took a big hit because people couldn't believe we paid that much for it. But with 68 wells, you can see that it actually worked out.
Speaker Change: But with safety as well as you can see that it actually worked out and thats the kind of the disadvantage of an acquisition you pay the upfront money.
Joseph Wm. Foran: And that's the kind of disadvantage of an acquisition; you pay the upfront money, and people can think you've overpaid. And so it takes a matter of months or years to prove it out, just as we did in state line.
Speaker Change: And people can think you've overpaid and so it takes a matter of months or years to prove it out just as we did in Stateline and on the second hand is you have these drilling opportunities.
Joseph Wm. Foran: Then, on the other hand, you have these drilling opportunities. And so you want a balance of those. But again, that takes time. And you do that one at a time.
Speaker Change: And so you want a balance of those.
Speaker Change: But again that.
Speaker Change: Thanks, Todd and you do that one.
Joseph Wm. Foran: So it's an incremental deal. Over time, there are advantages to both. And the best way to approach them, I believe, is to have a wide variety of ways to grow. You could add midstream into that. Building out midstream is a growth opportunity, an organic growth opportunity, but it enhances your product, the value of your production, because today, what you need in Delaware is flow assurance. And there's a capacity limitation, and unless you have some flow assurance and work with the other pipelines, you're going to have some difficulties getting your product to market.
Speaker Change: So its an incremental deal.
Todd: Over time, there are advantages to both in the best way to approach them. I believe is have a wide variety of ways to grow.
Todd: You could add midstream into that build it now midstream as a growth opportunity.
Todd: Any growth opportunity, but enhance this year.
Todd: The value of your production because today.
Todd: What you need in the Delaware is flow assurance and there's a capacity limitation and unless you have some flow assurance and work with the other pipelines.
Todd: Youre going to have some difficulties getting your product to market.
Joseph Wm. Foran: So, I just point out that, uh...you need to be prepared to grow in all these different ways, because you never know what the economy is going to do or circumstances. And, as another example, in the high storm Erie.
Speaker Change: So I would just point out that.
Speaker Change: That.
Speaker Change: You need to be prepared.
Speaker Change: To grow in any.
Speaker Change: And all of these different ways, because you never know what the economy is going to do.
Speaker Change: Or circumstances and.
Speaker Change: As another example is the high storm Aerie.
Joseph Wm. Foran: Because we had our own midstream system, those guys, I really had respect for them because they were out there sleeping in their trucks and keeping the gas flowing that might not have occurred elsewhere. But because it was their gas as well as ours, they were out there sleeping in their trucks. And on that point, I just say I think it's helped that we have an employee share purchase plan, in which we have over 90% participation.
Speaker Change: Because we had our own midstream system.
Speaker Change: As gas.
Speaker Change: Really had respect because they were out there sleeping in their tracks and keeping the gas flow with that might not have occurred.
Speaker Change: Swear but because.
Speaker Change: It was their gas is well over ours.
Speaker Change: They were at their sleeping in their tracks and on that point I would just say I think it's helped.
Speaker Change: That we have an employee share purchase plan, which we have over 90% participation and theyre professionals. They would have probably done that anyway, but it didn't discourage you may need to keep the gas flowing because theyre all shareholders too.
Joseph Wm. Foran: And they're professionals; they would probably have done that anyway. But it didn't discourage them from keeping the gas flowing because they're all shareholders too. Now, your second question was about our financial strength to do this. Is that right, Scott?
Speaker Change: Now your second question.
Speaker Change: Was about our financial strength to do this is that right Scott.
Scott Hanold: Yeah, yeah, just an idea of your capacity to do more at this point.
Scott Hanold: Yes, yes, just an idea of your capacity too.
Do more at this point.
Joseph Wm. Foran: Well, that's a good question. Thank you for asking.
Scott Hanold: Well good question. Thank you for asking but recently, we did what we called our Triple Crown.
Joseph Wm. Foran: But recently, we did what we called our triple crown, which was we refinanced our reserve-based lending agreement with those 19 banks that I mentioned. And we, we, We've increased it from $1.325 billion to $1.325 billion. But as we did that, we've paid down our RBL to where we only have approximately $25 million borrowed on the RBL, and we were able to do that because the RBL was signed on Friday, and on Monday, we did the stock offering for 5 million shares, and that's approximately $350 million.
Scott Hanold: Yes.
Scott Hanold: We refinanced our reserve base lending agreement with those 19 banks that I mentioned.
Scott Hanold: And we.
Scott Hanold: <unk>.
Scott Hanold: We increased it from <unk> three to five 2 billion.
Scott Hanold: And a half.
Scott Hanold: Yes.
Scott Hanold: But as we did that we've paid down our RBA out to where we only have approximately 25 million borrowed on the RV, Yale and weight rate able to do that because.
Scott Hanold: RB Al was signed on Friday, and on Monday, We did the stock offering for 5 million shares and Thats approximately.
Scott Hanold: $350 million.
Joseph Wm. Foran: And so that enabled us to pay down all the RBL. So we have an app today, basically a billion and a half on the RBL available to do acquisitions. Then we went out and on Tuesday did a bond offering that was heavily oversubscribed, and as was the stock offering, and we picked up 900 million. And those monies aren't due till 2032.
Scott Hanold: And.
Scott Hanold: So that enabled us to pay down all of the <unk>.
Scott Hanold: <unk>. So we have a nap today basically a billion and half on that.
Scott Hanold: <unk> available to do acquisitions, namely went out and.
Scott Hanold: On Tuesday did a bond offering that was heavily oversubscribed and <unk>.
Scott Hanold: <unk> was the stock offering.
And we picked up $900 million.
Scott Hanold: And those monies aren't due till 2032, so we're sitting there with time on our hands, we can afford to be patient.
Joseph Wm. Foran: So we're sitting there with time on our hands; we can afford to be patient. But we're actively looking to grow either way, or a third way with midstream. So, First Matador grew primarily by acquisition. Second, the second Matador has been primarily organic. But even acquisitions, we're looking for acreage to go along with whatever production comes. So we're not www.youtube.com www.larryweaver.com You know, we try to be creative and solve problems and work with others, so we're active in all those directions.
Scott Hanold: But where we're actively looking to grow.
Scott Hanold: Either way.
Scott Hanold: <unk>.
Scott Hanold: Or a third way with midstream so.
Scott Hanold: First matador.
Scott Hanold: Primarily by acquisition second the second Matador has been primarily organic.
Scott Hanold: But even the acquisitions, we're looking for acreage to go along with whatever production come so we're not.
Scott Hanold: Particularly interested in some that's all production we want a balance between.
The drill bit ad.
Scott Hanold: And and.
Scott Hanold: Actual production.
Scott Hanold: So that you had in effect have something thats half organic half.
Scott Hanold: Half production sell some balance on that.
Scott Hanold: And.
Scott Hanold: We try to.
Scott Hanold: B.
Scott Hanold: Creating value.
Scott Hanold: All of the problems and.
Scott Hanold: And work with others. So we're active in all of those directions.
Scott Hanold: Great, I appreciate the caller. And as my follow up, Joe, you mentioned flow assurance is important. And you know, right now, Oahu gas is obviously under pressure and, you know, in the negative kind of arena, and it probably will persist in the back half of this year. Can you talk about your position? Is there any concern of not getting your gas sold or, you know, getting, you know, some weak pricing on the residue gas? Can you kind of give us your view of those dynamics from Matador?
Speaker Change: Great I appreciate the color and my follow up Joe You mentioned flow assurance is important and right now while high gas is obviously under pressure.
Speaker Change: And the negative kind of arena.
Speaker Change: And it probably will persist in the back half of this year.
Joe: Can you talk about your position is there any concern of not getting your gas sold or getting.
Some weak pricing on the residue gas can you kind of give us.
Joe: Your view of those dynamics for Matador.
Joseph Wm. Foran: Well, that's another good question, Scott. And I'll let Gregg Krug, who's the head of our marketing and midstream, answer that. And this is something we've talked a lot about, put a lot of thought into, and I think Gregg's done a terrific job of creating diversity in our sales of our gas product.
Speaker Change: Well thats another good question Scott.
Speaker Change: Yeah.
Speaker Change: Gregg Krug answer that who is ahead of our Mark Canadian midstream.
Gregg Krug: And this is something we've talked a lot about but a lot of thought into and I think.
Gregg Krug: Greg.
Gregg Krug: A terrific job of creating diversity on our.
Gregg Krug: Sales of our gas product.
Gregg Krug: Hey.
Greg: Thanks, Joe Scott Weaver.
Gregg Krug: Thanks, Joe. Yeah, Scott, we've tried to take a very wide look at this as far as to try to get our diverse market portfolio out there so that we're not exposed to one particular index or the other. Like Houston Ship Channel, for instance. We're looking at all those different options, and I think we've got a pretty good spread of our exposure to all the different industries. And Gregg, just to add to that a little bit, is that even at WAHA, you have a range that you could either go with, or you have other choices. And the same thing is that with the NGLs, that gives us a hedge on price. Yes, that's Yeah, that's correct, Joe.
Speaker Change: We've tried to take.
Speaker Change: A very wide look at this as far as to try to to get our diverse market portfolio out there as far as where we're not exposed to one particular index or the other we've got a lot of different options here.
Speaker Change: We're from hedging too.
Speaker Change: Financial positions.
Speaker Change: Sure.
Speaker Change: <unk> gas transport on firm transport or I should say.
Speaker Change: The Wifi applies to other regions.
Houston ship channel for instance.
Speaker Change: We're looking at all those different options and I think we've got a pretty good scatter of our exposure to to all the different industries.
Speaker Change: And Greg just to add to that a little bit is that.
Greg: <unk> you have a range that you can.
Greg: Either go with or you have other choices and the same thing is that with the Ngls that gives us a hedge on pricey.
Greg: Yes, that's yes, that's correct, Joe as far as the Ngls need to keep in mind, we are a two stream reporter so.
Gregg Krug: As far as the NGOs need to keep in mind, you know, we are to be a stream reporter. So when we talk about our natural gas pricing, we also have an NGO component, and we get a nice uplift on that, you know, for. It all kind of really depends on the particular wells, but some of these wells are really rich. And there's a lot of NGL that comes along with the production, so we get a nice uplift on that.
Greg: When we talk about our natural gas pricing, we also have.
Greg: And NGL component and we get a nice uplift on that.
Greg: And it really all depends on the particular wells, but some of these wells are really rich.
Greg: And.
Greg: There's a lot of <unk>.
NGL that comes along with the production so we get a nice uplift on that as well.
Gregg Krug: Yeah, but in particular, just just just to hone in on one point, just if I could, do you have any concerns? I mean, you're growing production in the Permian, it's tight with capacity right now. I don't think a lot of other players are growing production too much. But do you see a risk that, you know, you may not be able to sell your gas? Or, you know, there'd be difficulty selling your gas that could constrain things in your outlook at this point? Unknown Speaker No, we don't.
Speaker Change: And in particular, just just just to hone in on one point just.
Speaker Change: If you could do you have any concerns.
Speaker Change: Youre growing production in the Permian its tight with capacity right now I don't think a lot of other players that are growing production too much but do you see a risk that you may not be able to sell your gas.
Speaker Change: Or there'll be difficulty selling your gas that could constrain things in your outlook at this point.
Speaker Change: No we don't.
Speaker Change: One being reason is that we do hold transport.
Speaker Change: Firm transport on these pipes.
Speaker Change: If.
Speaker Change: And then we are protected as far as on the hedging part of it on the basis there at wall for instance.
Gregg Krug: of gas that we've had, and so we've got I think we've got plenty of transport to get out of the basin. We are not, we're not concerned with that. Now you're right as far as the growing production that we have. That's one reason we're looking at additional capacity out of the basin and we're looking at all the different pipes. And I think we're well on our way to getting in a position I appreciate it.
Speaker Change: Where is.
Speaker Change: If you see negative pricing there.
Speaker Change: We've locked in that basis number.
Speaker Change: A portion of our gas, where we're not exposed to that with that portion of gas that we've hedged.
<unk>.
Speaker Change: So we've got I think we've got plenty of transport to get out of the basin.
Speaker Change: We are not.
Speaker Change: We're not concerned with that now youre right as far as with growing production that we have.
Speaker Change: One reason, we're looking at additional capacity.
Speaker Change: Capacity out of the basin and we're looking at all the different types.
Speaker Change: And I think we're well on our way to get in a position, where we're we're going to be fine on that.
Speaker Change: I appreciate it thank you.
Operator: One moment for our next question. Our next question comes from Tim Rezvan with KeyBank Capital Markets. Your line is open.
Speaker Change: Thank you.
Speaker Change: One moment for our next question.
Speaker Change: Our next question comes from.
Tim Rezvan: Tim resin with Keybanc capital markets. Your line is open.
Tim Rezvan: Good morning, everybody. Thank you for taking my questions.
Tim Rezvan: Good morning, everybody. Thank you for taking my questions. I just wanted to touch on what Scott was talking about in terms of M&A and more on the bolt-on side. If we look at the kind of cash you've raised, you know, for the tender and then the equity issuance, it was much greater than what you spent, you know, in the last couple quarters on bolt-ons. So can you provide any kind of line of sight on what you think the bolt-on budget maybe looks like this year?
Tim Rezvan: Just wanted to touch on what Scott was talking about on M&A and more on the bolt on side.
Tim Rezvan: If we look at kind of the cash you've raised for.
Tim Rezvan: For the tender and then the equity issuance.
Tim Rezvan: With much greater than what you spent in the last couple of quarters on bolt ons.
So can you provide any kind of minus site on what you think the bolt on.
Tim Rezvan: Budget, maybe it looks like this year I know, it's hard to gain but there's a lot of questions about that any kind of financial ring posts you can put around on what you see for the rest of the year would be very helpful. Thank you.
Tim Rezvan: Tim I appreciate your question, but it's really difficult to put any.
Speaker Change: Number around it all it's kind of like going fishing is when you go fishing, you don't know, whether youre going to catch to fish or 10 fish.
Tim Rezvan: I know it's hard to gain, but there are a lot of questions about that. Any kind of financial ring post you can put around on what you see for the rest of the year would be very helpful. Thank you.
Speaker Change: Youre going to get out there and say what.
What works and what's available and what can be done either.
Speaker Change: Reasonable price.
Speaker Change: Worthy of the SaaS that we don't depend on acquisitions to meet our growth targets those are opportunistic and in many cases.
Joseph Wm. Foran: Uh, Tim, I appreciate your question, but it's really, uh, difficult to put any kind of value on it. https://www.youtube.com.au We're merely adding to the working interest that we already have, and that's kind of the way it works on trades, too, is that we trade out of some we don't have a big interest in for something that is more direct to us. So it's really a moving target that we first pin our growth on our drilling activity, where we control the leases and we operate the wells, and then we opportunistically look at acquisition opportunities, whether it's by trade or by adding working interest from our partners or acquiring a company, as we did at Vantage last year. We want to maintain our ability to go either way.
We are merely adding to the working interest that we already have and that's kind of the way. It works on trades to is that we trade out of some we don't have a big interest in for something that.
As more direct on that so it's a.
Speaker Change: Really a moving target that.
Speaker Change: We first PNR growth on our drilling activity, where we control the leases and we operate the wells and then we opportunistically look at the acquisition opportunities, whether it's trade or by adding.
Speaker Change: Working interest from our partners or acquiring a company as we did advantage last year.
Speaker Change: <unk>.
Speaker Change: We have.
Speaker Change: Put ourselves this year with that Triple Crown.
Speaker Change: <unk> stock offering and bond offering to where we can do both.
Speaker Change: <unk> made our drilling.
Speaker Change: Both by drilling and growth by acquisition.
Speaker Change: We'll do a company when the opportunity is right, but we are.
Speaker Change: We want to maintain our ability to go either way. So if you hit a dry spell on acquisitions, you've got plenty of.
Joseph Wm. Foran: So if you hit a dry spell on acquisitions, you've got plenty of Leases to drill and in that case we're confident that we could acquire an additional rig or even two to grow by organically by drilling that or our main drilling contractor for since the inception of Matador 40 years ago has been Patterson or its predecessors and we're confident they would work with us to get us the necessary rigs to if we needed to do organic growth because the acquisitions have been slim and the same thing is we're financially in a position that we don't have to cut back on the eight rigs that we currently have running that are high spec, Subhasish Chandra, Matador Resources Co. We've tried to arrange it to give us, as we try to say, as many options as we can, Tim.
Speaker Change: Leases to drill and in that case, we are confident that we could acquire an additional rig.
Speaker Change: Or even to two.
Speaker Change: To grow by.
Speaker Change: Organically by drilling that or our main drilling contractor for since the inception of Matador 40 years ago has been Patterson or its predecessors, and we're confident they would work with us to get us the necessary raise if we needed.
Speaker Change: To do organic growth because the acquisitions have been slam and the same thing as we're financially.
<unk> <unk>.
Speaker Change: Physician that we don't have cut back on the eight rigs that we currently have running there.
Speaker Change: Hi, Spect.
Speaker Change: To do an acquisition because.
Speaker Change: As that indicated.
Speaker Change: We've got over a billion in half.
Speaker Change: Available plus our cash flow.
Speaker Change: And that's embarked on our current RV Gale and fail arguably bought some debt.
That would only go up with the acquisition so we.
Speaker Change: We tried to arrange it.
Tim Rezvan: Okay. Okay. I was trying for some numbers. I didn't think I'd get it, but I appreciate the context.
Speaker Change: To give us is as we try to say as many options as we can't Tan.
Speaker Change: Okay. Okay.
Speaker Change: There are some numbers that I didn't think I'd get it but I appreciate the context.
Joseph Wm. Foran: Well, Tim, as I would say to you, Tim, as well as everybody else on the call, look, we'll answer the questions as best we can, but I want to remind you how we run an open shop here, that if you come to see us, we'll spend more time with you and let you meet some people. We always want you to know that you and the other analysts are welcome to come here and have a private session with us.
Speaker Change: Okay, if I could.
Speaker Change: For a number here.
Speaker Change: Okay.
Okay.
Speaker Change: Okay, well I can the Tam is that is that would say to you Tam as well everybody else on the call is look we'll answer the questions as best you can but want to remind you how we run an open shop here, if youll come to see US we'll spend more time with you.
Speaker Change: And let you meet some people we always.
Speaker Change: Once you note that you.
Speaker Change: And the other analyst are welcome to come here and have a private session with us.
Tim Rezvan: I appreciate that. If I could change gears on a follow-up,
Speaker Change: Okay.
Speaker Change: Appreciate that if I could see change gears on a follow up on the midstream side. It sounds like things are on track for Marlin for middle of 2025.
Joseph Wm. Foran: On the midstream side, it sounds like things are on track for Marlin for the middle of 2025. You know, as a bigger entity, how do you think about the kind of long-term, large-scale projects that you may need to do? And if you think you're kind of beyond sort of the heavy lifting on these large projects, how do you weigh the value of owning the segment versus highlighting the value of some potential transaction? Because you could argue there's not a lot of value in the stock today for San Mateo. And I'll leave it there. Thank you. Well, Tim, first, I would say that
Speaker Change: As a bigger entity, how do you think about kind of long term.
Speaker Change: Large scale projects that you may need to do.
Speaker Change: And if you think you're kind of beyond sort of the heavy lifting on these large projects. How do you weigh the value of owning this segment versus highlighting the value add some potential transaction because you could argue there's not a lot of value in the stock today for.
Speaker Change: San Mateo and I'll leave it there thank you.
Speaker Change: Well, Tim first I would say that as a buying opportunity for any shareholder out there that it feels we're not getting full value because in time, we all know the market begins.
Speaker Change: In the near term might be a popularity contest, but in the long term, it's Alain Gail so.
Joseph Wm. Foran: Well, Tim, first, I would say that's a buying opportunity for any shareholder out there that feels we're not getting full value because in time, we all know that the market begins, you know, in the near term, maybe a popularity contest, but in the long term, it's a weighing deal. So if I, you know, that's why I think you have 90% or more participation by the employees here, because they can see the value of the midstream and, and the https://www.youtube.com As an attraction or that, it was done because it had usefulness, utility to our drilling completion and production operations and assured us that we wouldn't be waiting on pipelines but be getting our gas to market and when that well was ready to come on, there'd be pipe waiting there to take it to market.
Speaker Change: That's why I think you have 90% or more participation by the employees here because they can see the value of the midstream and the.
Speaker Change: Yes.
Speaker Change: And the returns that we're getting from our drilling operation So.
Speaker Change: Patient on that I've never sold a share of Matador stock because I could see that the value is increasing some of it had not yet been recognized but in time.
Speaker Change: <unk> that it will that.
Speaker Change: The midstream was done not just <unk>.
Speaker Change: As a as an attraction or.
Speaker Change: That it was done because it had usefulness utility to our.
Drilling completion and production operations and assured us that we wouldn't be waiting on pipelines, but begin their gas to market and when that well was ready to come on there'd be pipe waiting there to take it to market, it's had additional benefit because of <unk>.
Joseph Wm. Foran: Now it's had additional benefit because of changes in environmental regulations so that we're not flaring, and over the past four years, we've cut our emissions by 55%, which is partly enabled by having our own pipelines to carry away the water and where we're not having to flare, and we're not trucking in the oil and gas and creating that environmental problem. But virtually all of our oil is on pipes, so it's something I think that If somebody comes in with a serious offer or a serious proposal in some way to work with us on our pipeline or, as I said, even to acquire it, we'll give it serious consideration. But right now, we can find plenty of use for it in getting our oil, gas, and water taken away as needed. It is helpful Thank you, Tim. One moment for our next
Speaker Change: Changes in the environmental.
Speaker Change: Regulations.
Speaker Change: We're not flaring and over the past four years, we cut our emissions by 55% which is.
Speaker Change: Partly enabled by having our own pipelines to carry the weight of the water and where we're not having to flare.
Speaker Change: And we're not trucking, the oil and gas and creating that environmental problem, but.
Speaker Change: Virtually all of our oil is on.
Speaker Change: On pop so.
Speaker Change: It's something I think that adds value, but it also is very useful to our day to day operations and I think in time.
Speaker Change: People will say that and as a public company. We play a strike gain if somebody comes in with a serious offer or a serious proposal in some way.
Speaker Change: To work with us on our pipeline or.
Speaker Change: As I said, even to acquire we will give it serious consideration.
Speaker Change: Now we in fact plenty of use for it and getting our oil gas and water taken away.
Speaker Change: As needed.
Speaker Change: And is helpful.
Speaker Change: Thank you.
Speaker Change: Thank you Cam.
Operator: One moment for our next question. Our next question comes from... Neal Dingmann with True Security. Your line is open.
Speaker Change: One moment for our next question.
Speaker Change: Okay.
Speaker Change: Our next question comes from.
Neal Dingmann: Morning guys, thanks for the time and Joe and the team, nice quarter. Joe, my first question, my first question just on oil services, maybe it's a little bit different. Joe, I know you've got great contacts and relationships there. I'm just wondering, I've heard more about, what are your thoughts these days, you and the team, about sort of bundling versus de-bundling when it comes to services? Because I guess where I'm going with that, it's heard, as of late, there's been sort of a passing through in different costs that have gotten cheaper.
Speaker Change: Neal Dingmann with true Securities. Your line is open.
Neal Dingmann: Good morning, guys. Thanks for the time and Joe and team Nice quarter. Joe. My first question first question just on all services, maybe ask this a little bit different Joe I know, you've got great contacts and relationships. There I'm just wondering if <unk> heard more about like what is your thoughts. These days you and the team about sort of bundling versus deep bundling when it comes to services because.
Neal Dingmann: I guess, where I'm going with that it is heard as of late.
Neal Dingmann: And then sort of pass through and different costs that have gotten cheaper. So I'm. Just wondering when you think about oilfield services. How do you. All do you have a preference when it comes to bundling or indeed bundling of the sand and chemicals and other things around.
Neal Dingmann: So I'm just wondering, when you think about oil field services, how do you all, do you have a preference when it comes to bundling or de-bundling of, you know, the sand, the chemicals, and other things around?
Joseph Wm. Foran: First, I'm just going to thank our service providers. They've done a terrific job of being there when needed, and their efficiency and everything else. Great relationships and really appreciate the extra effort that we've put in through them. It's been a team effort, so it's not just us that have gotten things there on time. And had success in the field. They've participated, and they've been great to work with. But for a specific answer to your question, I'm going to turn to Chris, and he can tell you his thoughts on bundling.
Neal Dingmann: First I am just kind of think our service providers.
Neal Dingmann: Done a terrific job of being there when needed in their efficiency and everything else.
Neal Dingmann: Great relationships and really appreciate the extra effort that we've gotten.
Neal Dingmann: Through them and.
Neal Dingmann: <unk>.
It's been a team effort. So it's not just asset has gotten things there on time.
Neal Dingmann: And had this SaaS in the field, they've participated and they've been great to work with but on specific answer to your question I'm going to turn to.
Chris and he can tell you half his thoughts on Burnley.
Christopher P. Calvert: Hi Neal. It's Chris Calvert, EVP and COO. You know, it's a great topic, you know, and I think one thing that we do like to highlight is the partnership that we have with Patterson. And really, if you want to call it bundling, you know, from a drilling and pressure pumping perspective, that is, I guess, what you would call bundling. We use two of the largest cost centers that are provided by one parent umbrella company, that is Patterson UTI.
Chris: Hi, Neal it's Chris.
Christopher P. Calvert: Chris Calvert EVP CFO.
Christopher P. Calvert: It's a great topic and I think one thing that we do like to highlight into is the partnership that we have with Patterson and really if you want to call. It bundling.
From a drilling and pressure pumping perspective that is I guess, what you would call bundling. We use two of the largest cost centers that are provided by one parent umbrella company that is Patterson UTI. They have universal pressure pumping that merged with next year and so that is really kind of the bundling of two of our largest cost centers and we feel that that is a huge.
Christopher P. Calvert: Benefit witnessed when this transaction took place for the merger between <unk> and next year. The services that we were used to with Patterson as far as quality of crews that carried over.
Christopher P. Calvert: You know, they have universal pressure pumping that merged with Nextier. And so that is really kind of the bringing together of two of our largest cost centers. And we feel that that is a huge benefit when this transaction took place for the merger between UPP and Nextier, the services that we were used to with Patterson as far as quality of crews that carried over. And, you know, so we look at things to where that is really kind of a bundled package within our drilling contractor and our pressure pumping provider. On you've mentioned sand and pressure pumping.
Christopher P. Calvert: And so we look at things to where that is really kind of a bundled package within our drilling contractor and our pressure pumping provider.
Christopher P. Calvert: And you've mentioned sand and pressure pumping.
Christopher P. Calvert: Similar to our drilling contracts similar to gas takeaway, we always value Optionality here is something that we're always going to prioritize and so when you think of sand bundling whether it is provided by the pressure pumping company or self source through a third party. We continue to look at Optionality in the best way to optimize any sort of difference or delta in between <unk>.
Christopher P. Calvert: Volumes from our sand contract or excuse me from the pressure pumping provider or a spot rate that could be a little bit better at any given time and so the value of the optionality between those two services is something that we always look at but we do bundle that is well at times and so it is something that we are always looking at and so those I think cover really two of the largest cost centers that we talk.
Christopher P. Calvert: Similar to our drilling contract, similar to gas takeaway, we always value optionality here as something that we're always going to prioritize. And so when you think of sand bundling, whether it is provided by the pressure pumping company or self-sourced through a third party, we continue to look at optionality and the best way to optimize any sort of difference or delta between contracted volumes from a sand contract or, excuse me, from the pressure pumping provider or a spot rate that could be a little bit better at any given time.
Christopher P. Calvert: Two and Thats really kind of how we see these things are advantaged advantages to bundling and then also it makes sense, sometimes to have optionality to where youre not tied to a specific provider.
Speaker Change: That makes a lot of sense. Thanks for the details and then just a quick follow up on midstream.
Speaker Change: With the connections in place now flow insurance seems like everything's going your way on that you all anticipate more sort of third party.
Speaker Change: Going through that or should we just should we expect that anytime soon.
Speaker Change: Yes Neal.
Neal Dingmann: We're developing third party.
Neal Dingmann: Relations on a concept basis, our gas out there meeting and.
Neal Dingmann: On air by now we'd run a strike gain and one interesting thing that occurred and Gregg Krug, who is head of our marketing and midstream can elaborate on it but one of those third party said I am very comfortable having.
Neal Dingmann: Takeaway the gas and.
Christopher P. Calvert: And so the value of the optionality between those two services is something that we always look at, but we do bundle that as well at times. And so those, I think, cover really two of the largest cost centers that we talk to. And that's really kind of how we see these things. There are advantages to bundling, and it also makes sense sometimes to have optionality where you're not tied to a specific provider.
Neal Dingmann: And pipeline because.
Neal Dingmann: That.
Neal Dingmann: If you are flowing I am going to be slower.
Neal Dingmann: And I won't be shut in.
Neal Dingmann: So.
Neal Dingmann: That if you're moving your gas you got to be moved and Mac gas too. So we appreciate that perspective and Thats true.
Neal Dingmann: We are proud of our.
Neal Dingmann: A third party.
Neal Dingmann: People selling the gas and we tried to give them. The exact same service that our people get and and <unk> So far.
Neal Dingmann: <unk> been most helpful in getting other people to cost to see if we can make a deal on.
Neal Dingmann: A reference for us <unk> been real pleased with our servicing work right Greg.
Neal Dingmann: Yes, Yes. This is Greg again.
Neal Dingmann: That makes a lot of sense. Thanks for the details. And just a quick follow-up on midstream. With the connections in place now, floor insurance seems like everything's really going your way on that. Do you all anticipate more sort of third-party going through that? Or should we expect that anytime soon?
Greg: I Echo what Joe just said as far as we definitely do not play favorites when it comes to Matador gas over over.
Speaker Change: But our third party.
Greg: That we have out there.
Greg: And I think it's critical that we do that we want we want to stay credible.
Greg: We don't.
Speaker Change: That's not that's not the way to to treat your third party whenever you've got them. All your systems. So we definitely try to.
Gregg Krug: Yes, Neal, we're developing third-party applications. Yeah, yeah. This is Greg again.
Treat.
Speaker Change: Them the same as is the Matador gas.
Gregg Krug: I echo what Joe just said as far as we definitely do not play favorites when it comes to Matador gas over our third-party gas that we have out there. And I think that's critical that we do that we want to stay credible, and we don't. That's not the way to treat your third-party whenever you've got them on your system. So we definitely try to, https://www.youtube.com.au, as far as the other midstream companies and so forth, because we did have some shut-ins on some of the wells that we had connected to other places.
Speaker Change: It is a comfort I think to some of them as far as last one thing we have heard as far as that.
Speaker Change: We're going to go the extra effort to make sure gas flows.
Speaker Change: During bad storms.
Speaker Change: Joe just talked about.
Speaker Change: Winter storm here, that's a good example of that.
Speaker Change: Our folks were out there.
Speaker Change: Good day and night.
Speaker Change: Nighttime too.
Speaker Change: Actually working during sub freezing weather.
Speaker Change: I can't say that necessarily about some of the other folks out there.
Speaker Change: As far as the other midstream companies and so forth.
Speaker Change: Because we did have some shut ins on some of the wells we had connected.
Speaker Change: Other places so.
Gregg Krug: So that is, I feel like there's some assurance there for third parties. Yeah, and on that same deal, we're comforted by the amount of repeat business. Virtually all of our current third-party customers are repeat customers that have been with us before.
Speaker Change: That is.
Speaker Change: I feel like there is some assurance therefore for third parties.
Speaker Change: Same deal as well.
Speaker Change: By the amount of repeat business virtually all of our current third party customers are repeat customers they've been with us before but let me turn it to Glenn who is the head of our production that is making that happen.
Glenn W. Stetson: So let me turn it to Glenn, who's the head of our production, who is making that happen. Yeah, and Neil, I just wanted to kind of pile on here and give a shout-out to the guys in the field. You know, Sam Witten and Paul Ramirez were a big part of getting those connectors driven to completion on time or ahead of time and on budget. You know, those connectors, you know, in the quarter, we installed over 50 miles of pipe, and we talked about, you know, some of the oil field service side, but, you know, those guys work very closely with the companies that construct those pipelines, and we, you know, were able We have a number of wells that are going to produce two, Subash Chandra, Kevin MacCurdy, Jeoffrey Lambujon, Timothy Rezvan, Tom Wilson, and Billy Goodwin.
Glenn: I just wanted to kind of pile on here and give a shout out to the guys in the field, Sam Witten and Paul Ramirez, where a big part of.
Glenn: Getting those connectors.
Glenn: Even to completion on time or ahead of time and on budget.
Glenn: Those those connectors in the quarter.
Glenn: Installed over 50 miles of pipe and we talked about.
Glenn: Some of the oilfield service side, but yes, those guys work very got our guys in the field work very closely with the companies that construct those pipelines and we.
Glenn: We're able to do quite a bit of work in the first quarter and it sets us up very nicely for the second quarter. We have a number of wells that are going to produce too.
Glenn: Utilize those connectors, including those 'twenty, one <unk> south wells so.
Glenn: It was a.
Neal Dingmann: Great details. Thanks, Joe. Thanks, team.
Glenn: Very busy quarter, and again kind of sets us up really nicely here.
Operator: Thank you. One moment for our next question. Our next question comes from Zach Parham with JPM. Your line is open.
Glenn: For Q2.
Speaker Change: Great details thanks, Joe Thanks team.
Speaker Change: Thanks, Neil Thanks Neal.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Our next question comes from Greg Palm with J P. M. Your line is open.
Zach Parham: Hey guys, thanks for taking my question. You highlighted that higher oil volumes were driven by better than expected production at State Line. I noticed you hadn't turned in any wells there since 2Q of last year. So just trying to get a little bit more color on what's driving performance there now. Is it lower, shallower declines than you would have thought?
Speaker Change: Yeah.
Greg Palm: Hey, guys. Thanks for taking my question.
You highlighted that higher oil volumes were driven by better than expected production at state line.
Greg Palm: Noticed you haven't turned in line any wells there since <unk> of last year. So just trying to get a little bit more color on what's driving the outperformance. There is it lower shallower declines than you would've thought maybe just any color you can provide there on the better performance.
Zach Parham: Maybe just any color you can provide there will give better performance.
Tom Elsener: Hey, Zach, it's Tom Elsener. Yeah, thank you for your question. It's a great question. You know, I think a lot of the performance has been to, you know, really on the mid-stream team again. I know we've talked about that quite a bit, but they have a unique system that they designed down at State Line that Glenn can talk about more, but basically, they are able to custom put these wells into either a high-pressure, medium-pressure, or low-pressure gathering system that allows them to very rapidly, appropriately fit the wells to the pipeline pressure.
Greg Palm: Hey, Zack it's Tom Elsner, Yes. Thank you for your question, it's a great question.
Tom Elsener: I think I think a lot of the performance has been too.
Tom Elsener: Really on the midstream team again, I know, we've talked about that quite a bit but they have a unique system that they design that our stateline that Glenn can talk about more but but basically they are able to custom put these wells into either a high pressure medium pressure low pressure gathering system that allows us to very rapidly.
Tom Elsener: Appropriately.
Tom Elsener: And the lower pressure they can go into, the better the wells can produce. And that also aids in our ability to recover from offset activity if wells go down and need repairs. There are a lot of clever things that Glenn and his team and the San Jose team have been able to accomplish down there. They're certainly great wells, and we're very proud of them as well. But I think a lot of the comments you made here recently have been to the credit of the midstream team. I will say we have drilled six additional wells, and those will be online here later in the second quarter as well.
Tom Elsener: The wells to the pipeline pressure and the lower pressure that could go into the better the wells can produce.
Tom Elsener: And that also AIDS in our ability to recover from offset offset activity with wells go down and need repairs there.
Tom Elsener: There's a lot of clever things that Glenn and his team and we're going to say what <unk> been able to accomplish down there. There's certainly great wells and we're very proud of them as well, but I think a lot of the comments you made.
Tom Elsener: Here recently it into.
Speaker Change: To the credit of <unk> I will say, we have drilled six additional wells and those will be the <unk>.
Speaker Change: Line here.
Later in this later in second quarter as well.
Zach Parham: Got it. Thanks for that color.
Zach Parham: And then just one on the guidance, you raised the four-year guide to the high end of the range but didn't provide an update on the 4Q exit rate guidance, which was previously, I think, 98,000 barrels a day at the high end. Just trying to get a sense of the production trajectory going forward, you know, based on my math to get to the high end of the range in 24, it seemed like you were just over 100,000 barrels a day in 4Q. Maybe you could just give us an update on where you expect to end the year? And maybe any initial thoughts on what that could mean for 2025 volumes?
Speaker Change: Got it thanks for that color.
Speaker Change: And then just one on the guidance you raised the full year guide to the high end of the range, but it didn't provide an update on the <unk> exit rate guidance, which was previously I think 98000 barrels a day at the high end just trying to get a sense of the production trajectory going forward.
Speaker Change: On my math to get to the high end of the range of 24. It seem like you are just over 100000 barrels a day in <unk>, maybe if you could just give us an update on where you expect to exit the year and maybe any initial thoughts on what that could mean for 2025 volumes.
Brian J. Willey: Yeah, Zach, this is a this is Brian. Happy to answer that. Thanks for the question.
Speaker Change: Yes. Zach. This is this is Brian happy to answer that thanks for the question.
Brian J. Willey: Yeah, Zach, this is a this is Brian. Happy to answer that. Thanks for the question.
Speaker Change: You are right we play at the high end of guidance, we're really proud of the quarter that we had and to be able to point to the high end of guidance for the year I mean fantastic work by the teams and be able to execute that and we haven't been a lot of specifics on the second half of the year, whether the balance between the third quarter and the fourth quarter I think theres a lot of the golf to be played there and so.
Brian J. Willey: You know, and you're right, we played the high end of guidance. We're really proud of the quarter that we had, and to be able to point to the high end of guidance for the year. I mean, fantastic work by the teams and being able to execute that. And we haven't done a lot of specifics on the second half of the year, whether you know, the balance between the third quarter and the fourth quarter. I think there's a lot of golf to be played there.
Speaker Change: I think I expect third quarter to continue to improve over over second quarter, and then as it relates to fourth quarter obviously.
Speaker Change: A few months out and early in the year. So we haven't updated the guidance as it relates to that quarter yet but.
Brian J. Willey: And so, you know, I expect the third quarter to continue to improve over the second quarter, and then relating to the fourth quarter, obviously, you know, a few months out, and we're early in the year. So we haven't updated the guidance as relates to that core yet, but We're really excited about the remainder of the year and how it sets us up for a great 2024 and then into 2025. So there's really, really great news all around.
Really excited about the remainder of the year and how it sets us up for a great 'twenty 'twenty four and then into 2025. So it is really really great news all around.
Speaker Change: Okay. Thank you guys.
Speaker Change: Thanks Jay.
Speaker Change: Thank you.
Speaker Change: And our final question comes from the line of.
Speaker Change: Leo Mariani with Ross Your line is open.
Okay.
Speaker Change: Okay.
Leo Mariani: Hey, guys.
Leo Mariani: I wanted to just ask a little bit on Capex trajectory here Ronny.
Ross: Wanted to get a sense of how you see that kind of playing out I know you've got the the.
Ross: The second quarter guidance here would you guys expect capex to come down a bit.
Ross: In the second half of the year versus first half just trying to kind of get a sense of the capital cadence is it kind of relates to the operations.
Speaker Change: Lay out.
Speaker Change: A great question, we talk about it.
Operator: And our final question comes from the line of Leo Mariani with Ross. Your line is open.
Speaker Change: Every week, if not every day of how things are looking.
Leo Mariani: Hey guys, wanted to just ask a little bit about the CapEx trajectory here, wanted to get a sense of how you see that kind of playing out. I know you've got the second quarter guidance here. Would you guys expect CapEx to come down a bit in the second half of the year versus, you know, the first half? Just trying to kind of get a sense of the capital cadence as it kind of relates to the operator?
Speaker Change: A little hard to predict because.
Speaker Change: Somewhat tied to what the commodity prices do it if the commodity price goes up our current estimates would be a little low if it goes down then our our Capex estimates are probably going to be a little high now that simplistic.
But we try to put the best number we can and adjust it throughout the year. So.
Speaker Change: And stay within cash flow and the other financial parameters that we.
Leo Mariani: Leo, that's a great question, and we talk about it every week, if not every day, about how things are looking. And it's a little hard to predict because it's somewhat tied to what the commodity prices do. If the commodity price goes up, our current estimates would be a little low. If it goes down, then our capex estimates are probably going to be a little high. Now, that's simplistic, but we try to put the best number we can and adjust it throughout the year.
Speaker Change: We make our decisions by but let me turn it to.
Speaker Change: Brian Willey because he works on this every day, if not every hour and it certainly feels like every hour every minute. So no. We think about this a lot as lucky as Joe said and talk about that and Youre right. We did point.
Brian J. Willey: Going to the high end of guidance for production, but we are proud that we were able to do that and and not change our guidance as it relates to capital expenditures and you saw in our.
Leo Mariani: You know, and stay within cash flow and the other financial parameters that we make our decisions by. But let me turn it to Brian Willey because he works on this, and this is transcribed by https://otter.ai. And Leo, and that's the way I look at it, is that it's a two-variable deal. It's not just What are you going to spend, but what are you going to get for that money that you've spent? And that's why Brian's point, I think, is a really good one.
Brian J. Willey: Release, we had $10 million that was in savings that we incurred during the first quarter. So great job by Chris and his team the production group as well I mean, just really great execution.
Brian J. Willey: The remainder was just shifted to the second quarter and we expect throughout the remainder of the year that.
Brian J. Willey: And of that midpoint of guidance on the Capex. So youll see that just play out over the third quarter and then and then in the fourth quarter. So.
Brian J. Willey: Really excited to be able to raise production guidance, while we didnt changed Capex guidance I think that's a great story for us.
Brian J. Willey: And Leo and Thats way outlook. It is too variable deal it's not just.
Brian J. Willey: What's your what are you going to span, but what are you going to get for that money that you've spent and thats why Brian's point I think is a real good one.
Joseph Wm. Foran: We increased production, but we didn't increase CapEx, which meant we were able to achieve some cost savings as well as find ways to improve our efficiency. And we'll continue that throughout the year. And while it may vary a little bit, we'll be matching it up or comparing it to what we're getting accomplished in the way of increased production or increased services or fixed plants like the Marlin. So all that goes in, and I look upon it as a two-variable deal as opposed to a one-variable deal.
<unk>.
Brian J. Willey: We increased production, but we didnt increase capex, which meant we were able to achieve some cost savings as well as two.
Brian J. Willey: Find ways to improve our efficiency and we'll continue that throughout the year and while it may vary a little bit will be matching it up for <unk>.
Brian J. Willey: Comparing it to what we're getting accomplished in the way of increased production or increased services or <unk>.
Brian J. Willey: Or.
Brian J. Willey: Fixed plant.
Brian J. Willey: The Marlins, so all that goes in and I look upon it as a two variable deal as opposed to the one variable.
Joseph Wm. Foran: Okay, no, I appreciate that. And I just wanted to follow up on the midstream here. Joe, you certainly mentioned that you thought there was some hidden value in the stock and you could be, you know, somewhat patient and maybe wait for a deal at some point. But, you know, I know that Matador's a company that maybe expressed a little bit of frustration over the last year or so that all the midstream value creation hasn't, you know, shown up in the stock.
Speaker Change: Okay, No I appreciate that and just wanted to follow up on the midstream here.
Speaker Change: Joe You certainly mentioned that you thought there was some hidden value in the stock and you could be.
Speaker Change: Somewhat patient and maybe wait for a deal at some point, but I.
Speaker Change: I know that Matador as the companies that may be expressed a little bit of frustration over the last year or so that all of the midstream value creation hasnt shown up in the stock I mean, I guess to the extent that we kind of continue on and later this year or into next year and you still feel like theres not a lot of value in the stock as Matador, maybe poised at some point maybe take.
Speaker Change: Some some action and try to bring some of that value out on the midstream side.
Well.
Speaker Change: We're always looking for opportunities and as I said, we're a public company and people that have proposals we will.
Joseph Wm. Foran: I mean, to the extent that, you know, we kind of continue on and later this year or into next year, and you still feel like there's not a lot of value in the stock, is Matador maybe poised at some point to maybe take some action and try to bring some of that value out on the midstream side?
Speaker Change: Look at them.
Speaker Change: And if there are serious proposals will look at them very seriously and Wow.
Speaker Change: I think everybody runs that company would lie feels their stock is a little.
Leo Mariani: Well, you know, we're always looking for opportunities. And, as I said, we're a public company. And people that have proposals, we will look at them. And if there are serious proposals, we'll look at them very seriously.
Speaker Change: Underpriced.
Speaker Change: I don't know very many Ceos get out there and say hey gas our stock silver price you might want to trim a little bit.
Speaker Change: No.
Speaker Change: Yes, I think there are opportunities and you look at how we've outperformed overall.
How we've outperformed the S&P 500, the Russell 2000, or even are our peers. We've been one of the highest performing day.
Joseph Wm. Foran: And while I think everybody running a company would like to feel their stock is a little underpriced, I don't know very many CEOs get out there and say, Hey, guys, our stock's overpriced, you might want to trim a little bit. So yes, I think there are opportunities.
Speaker Change: Like antibody Youre always looking to do a little better but you can think that the first matador started with $270000.
Speaker Change: After 20 years, we sold for $398 million is a nice run, but this matador started 6 million and were.
Joseph Wm. Foran: And you look at us, how we've outperformed overall, how we've outperformed the S&P 500, or the Russell 2000, or even our peers. We've been one of the highest performing companies, but like anybody, you're always looking to do a little better. But if you can think that the first matador started with $270,000, and now we're in the 60s, you know, that's been a And during COVID, we went down to single digits, and anybody who bought then had a 10 to one gain. And now we're paying a dividend. And so it really doesn't matter so much what it was, but what is it down to someone, and what might they expect?
Speaker Change: Up there over 8 billion.
Speaker Change: Approaching nine.
<unk>.
Speaker Change: And an original shareholder.
Speaker Change: In the first Matador got in at 80, 590 cents, some like that and sold for 18 in a quarter. This matador there theyre basis of the original shareholders $3.56.
Speaker Change: And now we are in the.
Speaker Change: We're in the sixties.
Speaker Change: That's a pretty been a pretty good return and during Covid, we went down to single digits and aimed by about then has had at 10 to one.
Speaker Change: That gain.
Speaker Change: And now we are paying.
Speaker Change: David and then so it really doesn't matter so much what it was but what is it down to someone and what they might expect if it behaves like we've done the last 40 years, it's still going to be a good very good return for it.
Joseph Wm. Foran: And if it behaves like we've done the last 40 years, it's still going to be a good, very good return form, and continue to be a good, good run. I mean, that loan from $3.56 back in 2003 to 65 is a 20 is, you know, basically a 20 to one. So even if you're not getting 100 and transcribed by https://otter.ai, that has grown steadily since we did it.
<unk> continued to be a good good run I mean debt loan from $3.56 back in 2003 to 65 is it 'twenty.
Speaker Change: Is basically a 20 to one so even if you're not getting 100 person.
Speaker Change: <unk> of the quote whatever you call. It true value you still have the benefit of that over at 20 to one.
Speaker Change: That gain and we're paying the dividend now.
Speaker Change: That has grown steadily since we've done it so we think thats a good offering and if you look at the quality of the properties.
Joseph Wm. Foran: So we think that's a good offering. And if you look at the quality of the properties, you know, we feel like we're in the best basin, earning a good return, and have expanded to, you know, hedge our value some by having a midstream. So you not only have a commodity-based business, but you have a fee-based business. So that also reduces the risk.
Speaker Change: We're in the field like we are in the best Basin.
Speaker Change: Ernie good return have expanded.
Speaker Change: Hedge our value Sam by having a midstream so you not only have a commodity based business, but do you have a fee based business. So that also reduces the risk and you look at the heavy ownership by employees and again I'll repeat.
Joseph Wm. Foran: And you look at the heavy ownership by employees. And again, I repeat, I've never sold a share of stock. So And neither have most of our other officers because we can see the opportunity is growing, and sooner or later, if we really have the value that we think we have, those in the market will see it and come on. One of the major business magazines in the country, you would all know if I mentioned the title, had an article that said we were one of the eight stocks that people ought to buy. And the other companies that they mentioned in there were far better known than us, General Motors being one of them. But if you look at that article, I was flattered to be in that group.
Speaker Change: I've never sold a share of stock so.
And neither have most of our other officers because we can see.
Speaker Change: The opportunity is growing and sooner or later.
Speaker Change: If we really have the value that we think we have.
Speaker Change: <unk> thousand and the market will see it and come off.
Speaker Change: One of the major business magazines in the country you would all know if I mentioned the title had.
Speaker Change: <unk> had an article that said we were one of the eight stocks.
Speaker Change: People ought to buy and the other companies that they mentioned in their we're far better known.
Speaker Change: Then as general motors being one of them.
Speaker Change: But if you look that article I was flattered to be in that group. So.
Speaker Change: Bob.
Joseph Wm. Foran: So Transcribed by https://otter.ai, I think the outlook is good. We've been very consistent. You look at how many quarters that we've met or exceeded guidance, and I think the financial strength that we have, the oversubscriptions that we had both on the stock and the bond is another good sign. And then when you figure 19 different banks.
Bob: I think the outlook is good.
Bob: We've been very consistent.
Bob: You look at him eight quarters that we've met or exceeded guidance.
Bob: I think as.
Bob: And the financial strength that we have the over subscriptions.
Bob: We had both on the stock and the bond is another good sign and then when you figure 19 different banks.
Bob: And their credit committees looked at it and say this looks fine.
Bob: They had 19 different reservoir groups. So I think we've been thoroughly vetted.
Bob: And that has some value and I think the yeah.
Bob: Both our drilling sites and our midstream side are very optimistic that they will be continuing to add value in the years ahead and our team is has depth and theyre really working well together and as we said we've been given.
Joseph Wm. Foran: Subash Chandra, Robert Mariani, Tim Rezvan, Tom Wilson, Robert Macalik, Glenn Stetson, https://www.youtube.com Add value, and we've grown, as I said, from nothing. Basically, from nothing to be the number eight largest company in New Mexico. So, I think it's a pretty good record, and, um... Past performance is no guarantee of future performance, but that's why I like the bet, and I like our chances. Thanks. I appreciate all the questions.
Bob: Throw in prices on our.
Bob: Phil guys, because we think there is some of the best in the business and I think the staff is and it's really a total team effort and theyre not sharp elbows, but just a bunch of gas and are trying to.
Bob: And values and we.
Bob: <unk> grown as I say it from nothing.
Bob: Yeah.
Bob: Basically nothing to be in the number eight.
Bob: <unk> company in New Mexico.
Bob: So I think it's pretty good record and.
Bob: Past performance is no guarantee of future performance.
Bob: But that's why I like the bad and I like our chances.
Bob: Yes.
Speaker Change: Hey, Harry.
Harry: Good morning.
Harry: Thank you.
Speaker Change: Thank you.
Speaker Change: And come see us.
Leo Mariani: Thank you; I appreciate it all the time.
Speaker Change: Sure.
Speaker Change: Hello.
Speaker Change: 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.
Operator: Thank you. Ladies and gentlemen, this concludes 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 Change: Yes.
Speaker Change: Yeah.
Speaker Change: After that last speech.
Speaker Change: I think I'll, just say ditto.
Speaker Change: Okay.
Speaker Change: And <unk>.
Speaker Change: <unk>, we really appreciate you all listening in and the invitation to come see us and visit more at length and more detailed about any questions. You have is open.
Joseph Wm. Foran: Well, after that last speech, I think I'll just say ditto and tell you we really appreciate y'all listening in, and the invitation to come see us and visit for longer and give more detail about any questions you have is open, www.youtube.com.uk www.youtube.com.uk You know, as long as 40 years and many that are in the 20 to 30 years, and you can ask about their experience, and you have They'll be there with displays about the new drilling bits that are coming on to the market and other bits of innovation such as U-turn wells and explain how that comes about as well as other things we get asked.
Speaker Change: Is sincere.
Speaker Change: And we mean, it and I think as you've made our people youll feel more and more comfortable.
Speaker Change: With either investing or adding to your investment and also want to note that we have an annual meeting coming up June 13, I believe and we would invite you to attend the annual meeting its a little different than some because we didnt come up through private equities that we came up through friends and family. So you have.
Speaker Change: A lot of individual investors.
Speaker Change: Better there that have been shareholders for 40 years and.
Speaker Change: Yeah as long as 40 years and many that are.
And that 20 to 30 years and.
Speaker Change: In the asked about their experience and.
Speaker Change: And you have a chance to visit with our young people and take an estimate of what you think of them. They will be there with this place about the new drilling bits that are coming onto the market.
Speaker Change: And the other.
Speaker Change: Bits of innovation is.
Speaker Change: As the U turn wells and explain how that comes about.
Speaker Change: As well as other things that we get questions. So really think thats an opportunity that you may not get with larger companies.
Joseph Wm. Foran: So really think that's an opportunity that you may not get with larger companies; they're more formal, but You know, we really invite you, we'd like to get to know y'all better and, and continue to have more dialogue, so. Brian invites you and Van and our President. Let me turn it to our President.
Speaker Change: Companies are there more formal but.
Speaker Change: We really invite you would like to get to know you all better.
Speaker Change: Yeah.
Speaker Change: And continue to have more dialogue so.
Speaker Change: Brian and batch in landing our President let me turn it to.
Van H. Singleton: Van, what would you add to all this? I think, Joe, one thing I would add is just, obviously, everyone on the phone can't see the room, but the room is full of our team and the staff, and I really want to thank everybody in the room, everyone in the whole company, because these are good results. And those results wouldn't have happened if everyone weren't doing their part and pitching in and working together.
Brian J. Willey: Our present van but what would you add to all this I think Joe one thing I would add is just obviously everyone on the phone can't see the room, but bring this fall.
President: Our team and the staff and really want to thank everybody in the room, everyone in the whole company. Because these are good results and those results wouldn't happiness, everyone werent doing their part in pitching in and working together so.
Van H. Singleton: So also, thank you to, you know, some of these companies that we've done deals with. We feel like we try to structure our deals as win-win for both sides, and a lot of those companies are repeat business; we get back together when there's another deal to do. So it really is all about relationships. Joe's invitation is sincere. We do cherish our relationships.
Also thank you too.
President: Some of these companies that we've done deals with we feel like we try to structure our deals as win win for both sides and a lot of those companies are repeat business, we get back together when theres. Another deal to do so it really is all about relationships, we do cherish our relationships.
President: Jos irritation is sincere we do hope to see everybody when you get a chance or at least talk on the phone more if you come up with other questions. So thank everyone for pitching in and doing their part and we will keep running headlong into the next quarter.
Van H. Singleton: When you get a chance, or at least talk on the phone more,
Joseph Wm. Foran: Thank you everyone for pitching in and doing their part, and we'll keep running headlong into the next quarter. Yeah, I would like to say there are 50 over 50 people besides the senior officers here in this room. And we do that so everybody knows what's going on. And as an idea of where we go from here, and they get to hear your questions. And, And they like to hear my answers. And the answers are from other senior people. So it's a little different than some companies do.
President: I would like to say there is 50 over 50 people. Besides the senior officers here in this room and we do that so everybody knows what's going on and as.
President: As an idea of where we go from here and they get to hear your questions.
President: And.
President: And I like to hear my answers.
President: And the answers are the other senior people sell.
President: It's a little different than some companies do but it works for us having come up again with friends and family.
Joseph Wm. Foran: But it works for us, having come up again with friends and family. We've tried to maintain that availability. And, and, and we think you helped make us better with your questions and the like, because afterwards, we go over the questions and make sure that we're addressing them. And you have often made really good points that we've Thank you for taking into consideration and making our final decision. So, thank you. I mean, it's a process that works. It may be a little slow at times, but we'll get there, and we like our chances going forward. So, come see us and keep in touch.
President: We've tried to maintain that.
President: Availability and.
President: And we thank you Alf help make us better with your questions NOI because afterwards, we go over the questions and make sure that we are addressing them and they all have often made really good points that we've.
President: Taking into consideration in making our final decision. So thank you I think it is.
President: A process that works might be a little slow at times, but we will get there and.
President: And we like our chances going ahead, so <unk> and <unk>.
Operator: Ladies and gentlemen, thank you for your participation today. This concludes today's program.
Speaker Change: Keep in touch.
Speaker Change: Ladies and gentlemen, thank you for your participation today. This concludes today's program.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yes.
Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.