Matador Resources(US:MTDR)2023-07-26 19:09Financial Data and Key Metrics Changes - The company expects a 40% growth in production through 2023, increasing from 101,000 barrels of oil equivalent per day to over 140,000 barrels per day by year-end [8][10] - Debt has been reduced by $140 million, and operating expenses have decreased, with drilling costs appearing to have peaked [11][29] - Full-year production growth from 2022 to 2023 is projected at 21%, with oil growth at 24% [12] Business Line Data and Key Metrics Changes - The company is consolidating facilities to improve efficiency, reducing the number of operational facilities from 19 to 6, which will lower supervision costs and operating expenses [16] - The production from the Advance properties has exceeded expectations, contributing significantly to overall production growth [27][127] Market Data and Key Metrics Changes - The company is experiencing a competitive service cost environment, which is expected to lead to further cost reductions in the second half of the year [86][103] - The exit rate for production is projected to be around 143,000 barrels of oil equivalent per day, despite some temporary shut-ins affecting production [90][91] Company Strategy and Development Direction - The strategic plan focuses on increasing production, reducing debt, and lowering drilling and operational costs [29][134] - The company aims to maintain a leverage ratio of 1 times or less while pursuing growth opportunities through selective acquisitions and operational efficiencies [30][75] Management's Comments on Operating Environment and Future Outlook - Management expresses confidence in achieving the production target of 150,000 barrels of oil equivalent per day in 2024, supported by operational efficiencies and a favorable market environment [10][30] - The company emphasizes a focus on quality over quantity in growth strategies, aiming for sustainable and profitable growth [21][63] Other Important Information - The company has successfully integrated the Advance assets and is seeing positive results from this acquisition [27][73] - There are plans to expand midstream operations, with a new gas plant in the planning phases to meet increasing production needs [56][68] Q&A Session Summary Question: What is the expected cadence for bringing on new wells? - The company plans to commission a well every few days as part of a batch of 21 wells, with operations running through the end of September [15][35] Question: How will the company achieve its production goals with fewer rigs? - The company believes it can achieve its production goals with seven rigs due to improved efficiencies and reduced service costs [18][38] Question: What is the long-term capital allocation strategy? - The company aims to balance growth, debt repayment, and shareholder returns, with a focus on being nimble and opportunistic in capital allocation [73][75] Question: What are the expectations for CapEx and DNC costs? - The company has reduced its DNC cost guidance to $1,100 per foot, down from $1,124, reflecting a competitive service cost environment [85][102] Question: How will temporary shut-ins affect production guidance? - Temporary shut-ins are expected to impact production rates, but management remains confident in achieving the exit rate despite these challenges [90][91]