Matador Resources(US:MTDR)2025-07-23 16:00Financial Data and Key Metrics Changes - The company reported a year-over-year production increase of 31% [18] - Full year guidance for 2026 has been increased for both oil production growth and cash flow [11][12] - The company has a strong balance sheet with a debt ratio of less than one [16] Business Line Data and Key Metrics Changes - The midstream capacity has grown from zero at the time of the IPO to $720 million a day, with expectations to reach full capacity by the end of the year [13][14] - The company has successfully recycled over half of its water production, leading to cost savings [15] Market Data and Key Metrics Changes - The company is producing from 20 different zones in the Delaware Basin, indicating a diversified production strategy [12] - The company has 200 billion cubic feet of gas reserves in the Cotton Valley formations, awaiting more stable gas prices [12] Company Strategy and Development Direction - The company aims to increase both production and free cash flow in tandem, without compromising one for the other [8][9] - The strategy includes a focus on midstream operations to provide flow assurance and balance the asset base [14][16] - The company is committed to a "brick by brick" approach for land acquisition and reinvestment [81] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position for the second half of the year, citing drilling and cash flow opportunities [9][11] - The management emphasized the importance of maintaining flexibility in a volatile macro environment [90] Other Important Information - The company has raised its base dividend six times in four years and plans to review it annually [15] - The company has a strong insider buying trend, indicating confidence from leadership [92] Q&A Session Summary Question: Midstream EBITDA guidance - The company acknowledged a record second quarter for midstream operations but maintained the EBITDA guidance due to expected shifts in drilling focus [22][24] Question: Midstream IPO options - Management discussed the potential value of the midstream business not being reflected in the stock price and the ongoing evaluation of strategic alternatives [28][30] Question: Rig activity and production growth - The company plans to maintain an eight-rig program and is assessing the potential for additional rigs based on market conditions [36][38] Question: D&C cost drivers - The company reported D&C costs below guidance due to efficiencies and improved performance in lower-cost areas [45][49] Question: Uses of free cash flow - Management outlined three main uses for free cash flow: land acquisition, share repurchase, and debt reduction [80][81]