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The call conveyed a generally positive tone: operational outperformance, meaningful efficiency gains (faster cycle times, D&C cost targets ~6% below prior year), strong midstream strategic value (San Mateo) and tangible cost savings (field gas ~$100k/well), plus a large multi-year inventory base with high expected returns. Key near-term risks noted include macro/price volatility, regional basis (negative Waha) exposure until takeaway catalysts fully mitigate it, and uncertainty around back-half capital cadence and Woodford well results. Overall, positives (production growth, efficiency gains, midstream value, water recycling, and disciplined capital allocation) materially outweigh the documented lowlights.
Management reiterated measured, profitable growth with tight capital discipline and provided several specific metrics: full‑year CapEx cadence unchanged with 55–60% of the budget expected in H1 (about 50% of turns‑in‑line in H1, with Q3/Q4 down from Q2); D&C guidance of $785–$805 per lateral foot (≈6% below 2025) with a goal of sub‑$800; inventory of roughly 10–15 years with expected returns of 50%+ at various commodity prices; operational gains including ~13% faster average cycle times year‑over‑year, three‑mile laterals drilled in <16 days (≈40% faster vs. 2025), and 36+ MaxComm records set this quarter; water/midstream metrics of ~30% of Q1 water volumes from San Mateo, >70% of water recycled in 2026, a new recycling facility under construction, and a Hubrinson takeaway uplift of about $0.50/m; plus field‑gas use saving ~$100,000 per well and ~90% diesel reduction with electric fleets, and unbooked Woodford upside.
Management reported production is up in Q1 and stated that debt has been reduced and the balance sheet is the strongest in company history; market capitalization mentioned around $8 billion, positioning the company to meet challenges and optionality for measured growth.
Company cited 10 to 15 years of inventory with expected returns of ~50% or better at various commodity prices, providing long-term development optionality and limited inventory scarcity risk.
San Mateo midstream assets delivered operational and financial benefits (flow assurance, water/gas/oil pipelines). The Hubrinson takeaway catalyst is expected to shift volumes away from negative Waha pricing to Henry Hub, potentially improving realized pricing by approximately $0.50/mmbtu and materially benefiting gas economics.
Operational improvements drove outperformance: two additional net wells turned online in Q1; average cycle times improved ~13% year-over-year; three-mile laterals drilled in under 16 days (a ~40% improvement vs. 2025). Management expects continued efficiency-driven production gains.
Full-year D&C per lateral foot guidance of $785–$805 (about 6% below 2025). Levers include multi-well completions, Simul/TrimalFrac, ~90% reduction in diesel via electric fleets, increased water recycling, vendor relationships, and AI/MaxComm integration.
Approximately 30% of water volumes in Q1 were sourced from San Mateo assets; company reported over 70% of water usage coming from recycled sources in 2026 and commenced construction of a new water recycling facility to yield upstream CapEx savings and midstream revenue growth. Using field gas for fracs saves an average of $100,000 per well versus trucked compressed natural gas.
Company maintained its February guidance that ~55%–60% of the capital budget will be spent in the first half of the year. About 50% of turns-in-line are expected in H1, with Q3 and Q4 anticipated to be down from Q2 levels, reflecting disciplined, measured growth.
Expanded AI-driven analytics and MaxComm usage: the control room ingests over ~40 million data points per day to reduce downtime and optimize completions/drilling; the company reported 36+ operational records this quarter tied to MaxComm and AI use.
Drilled and cased first Woodford well with completions ongoing; management views the Woodford as a significant catalyst and potential upside, noting the land position is not currently counted in reserves or lease inventory.
Good morning, ladies and gentlemen. Welcome to the first quarter 2026 Matador Resources Company Earnings Conference Call. My name is Stacy, and I will be serving as the operator today. 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 Mac Schmitz, Senior Vice President, Investor Relations for Matador Resources Company. Mr. Schmitz, you may proceed.
Thank you, Stacy, and good morning, everyone, and thank you for joining us for Matador Resources Company’s first quarter 2026 earnings conference call. Some of the presenters today will reference certain non-GAAP financial measures regularly used by Matador Resources Company 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 forecasts of future events based on the information that is now available. Actual results and future events could differ materially from those anticipated in such statements. Additional information concerning factors that could cause actual results to differ materially is contained in the company’s earning...