Matador Resources Company Aktie

Greetings everyone. I'm delighted to welcome all of you here. I can remember going back 40 years ago or maybe a little more when we have our annual meetings, and we could have had them in a closet really. And today, it's fun to look out there and see over 300 people meeting today to help guide us going forward. So we started with $270,000 and today, we have over $10 billion in assets and moved our shareholder count from 2, which was Nancy and me. And then we were excited when we got to 17, which was our 17 original investors, some of which are here today.

And now we have 300 people showing up for a meeting like this, and it's really exciting because so much of our industry has gone to the private equity for capital, and we just stayed with friends and family. And I'm very pleased to report that PwC through Fortune Magazine listed the top 1,000 public companies in the States. And that was across all industries. And based on 2024 revenue, which, of course, our 2026 will be much better than that, we were ranked at 826. So we broke into the top 1,000 and the Dallas Morning News said we were #1 in revenue per employee across all industries, too.

So moving in the right direction, and we were a top 10 producer in New Mexico. And it's very exciting, again, because we look around the room, everybody knows some people in here, we've done this together, everybody pushing on the rock. So I want to welcome everybody officially to the 2026 Annual Meeting of Shareholders of Matador Resources and call the meeting to order.

As I indicated, I'm Joe Foran, Founder, Chairman of the Board of Directors and Chief Executive Officer. You probably all know that except for my 2 sisters who are here today, and they're sitting right there ready to raise their hand. And if you see them raise your hand, don't pay attention to them or encourage them, but I want to recognize them. And hopefully, they'll give me a break today. I would also like to welcome those listening in via our live webcast. For those on the webcast, we have approximately, as I said, 300 shareholders in attendance in person for our 2026 Annual Meeting. And that's probably the statement that most surprises people on Wall Street when we are on the road meeting with financial investors is that we still have old-fashioned enough to have a real shareholders' meeting annually and that it's an active shareholder group.

Before we get to the items to be considered and acted upon this meeting, I'd like to make a few opening remarks. So Mac, where are you? You got it? Okay. First, I want to show -- we started with -- back here with $270,000. My mother and dad were about the last that I got an investment from because they weren't -- told me that they would invest, but I had to get some others to invest first. So that's way moms and dads are sometimes. But they were part of the group as well as my grandmother and some other friends, but we started with $270,000. And then we sold 20 years later, $388 million. So an original shareholder in First Matador, we call that First Matador, they were in at $0.89, and we sold for $13.85, I believe.

So it was a nice gain, but we felt we could do even better the next time around. So we raised $6 million and today, we have assets over $10 billion. I think officially, it's $12 billion. So the growth has really continued. We don't have much debt. We've got good things in the pipeline being a public company. We can't talk about them, except to say that the pipeline, the staff has done an excellent job with number of projects coming up that should boost us that much further. So it's the best look at the inventory that we've had, just the high quality and the volume and I know the team will do a good job. So if all the people at Matador please stand that help pull that inventory together, please stand.

Now I want you to know they're not just people coming to collect checks in this last open period alone that we had over 90, almost 100 staffers buy stock none sold, but close to 100 people on staff bought stock. So they're not just talking about it. They're putting their money where their mouth is. And we're -- when we're on the road visiting with financial investors, they're just amazed that we're having that kind of participation because most companies don't enjoy that.

But our group has gotten out there, and we feel pretty optimistic and looking forward to being here next year to report on that progress. So we went -- and here's the story of this Matador is that in 2017, after we were underway for a little bit, we were beginning to accumulate some positions in the Delaware out there. And then 5 years later, we had 129,000 acres. And today, 3 years later, we've got 212,000 acres in the very best parts of the Delaware. So that outlook just loan on the acreage. And Gregg Krug helped lead the effort to start a midstream business because there were a lot of people having problems in the Delaware, getting their gas to market.

So to assure flow assurance, we kept building on and now we're at a point where we're going to be all around the basin in the best part of the basin, ready to take our gas to market to be sure it gets there, but other people, too, and it's a profitable investor. So all the people associated with the midstream company, please stand. These guys have done a great job.

Mark, I want you standing too. You've got to be there, some of you measurement guys to be sure that we get paid everything. And the measurement guys is often an overlooked part of a company because they're the ones that check -- the oil and gas business has a funny thing. Instead of you paying people what they ask, the midstream companies tell you what they bought.

Well, sometimes they make a few errors in not counting all the gas and oil that they've taken. So we have a group that has saved led by a Rick here that you -- we've nick named Hollywood, and you'll see later in the program why. He gave the video last year, and we have another one for you this year that I think you'll enjoy. But they've recovered -- it's in the $30 million to $40 million range of -- they've recovered additional money for gas that was taken but not yet paid for. So it's a tedious process in a way. But as you know, that's real money and very much help. So thank you, Rick.

Now that I've kind of introduced the idea of Matador, I'd like to recognize our directors who I delighted that they are the ones that really pressure test our ideas. They are the ones that make sure that we keep high caliber and integrity among our staff. And they really work as a team. That's been a big part of our effort is working more and more in teams realizing it's a complex business, and it takes a team to really think about all the decisions that have to be made in a given year and begin with Tim Parker, our Lead Independent Director. That's not enough. Stand, would you please?

All right. Tim was the Head of the T. Rowe Price oil and gas process. And so the history of Matador, he's been at the forefront and delighted to work with him. And he's an investor who bothered to learn the operational side as well as the financial side, which makes a big difference as our Lead Independent Director. Thank you, Tim.

Next, just hold the applause, I don't want to wear out your hands on this. But we talk about finding better-than-average people and Gaines Baty has led that effort. Gaines and I met coaching our boys in baseball. And what I learned from him was that the importance of hiring better-than-average people. And every time we hired someone better than we thought better than average, we felt we added value to the staff.

And through Gaines, we did, and we said we were NIL cool before there was an NIL practice. So thank you, Gaines. This is my daughter, Shelley. Right. Shelley is a graduate of Yale and a graduate of University of Chicago School of Business, almost is equal to where I went to school, University of Kentucky. So somewhere in the same category, I think, but we're proud of her, good kid, and appreciate you being here. And her husband's come up here to see what all the fuss about Matador is.

So John, will you please stand wherever you are? There you are. Good. Thank you, Jon. Rey Baribault, Rey has been a director now 12 years, and he was with Netherland and Sewell and one of the best petroleum engineers in the country and make sure that our reserves are really there, the projects test out and that we stay on track.

And then next, I'd like to recognize Monika Ehrman. Monika has many careers. She's been an engineer and she's been a practicing lawyer and now a professor at SMU and came on our Board and helps on all the committees and just been delighted with her experience, broad experience in making these decisions.

And finally, I'd like to recognize Susan Ward. Susan Ward was with Shell for many years, and she was the CFO when they took their midstream public. Did I get that right? Right? And the one warning is that anything that we send out to the Directors, Susan reads. And so it's pretty amazing that -- and she has a point of view and an experience that's unique that's going to help us as we think about taking our midstream business public as we get a little larger. Thank you.

I don't know if I was officially allowed to make that statement or not, but I don't think it's a secret. If they come up here on the stage and carry me off, you all have to come rescue me. Paul Harvey. Paul, you need to really be up here, but we ran out of space. So it's kind of like musical chairs. You leave one, and that's how you get them into a meeting. So -- but Paul has been a shareholder for over 40 years and has helped us all through the time on the financial side and on the messaging. He and Paul Flowers, who's here today, have really improved our messaging this year. Paul, where are you? Okay.

Stand, these 2 guys have really improved, sharpened our message, and I think you've seen it reflected in the price and giving us outside guidance. Thank you, Paul. Ken Stewart, Ken, next to him. Ken as former Head of Fulbright or Norton Fulbright. Too many. But anyway, he's the lawyer that signed all the papers -- published all the papers to make us this corporation today. So when we started back there in '19 -- well, 2003, you filed the incorporation papers and we're ready to take Matador -- first Matador public, except we filed all the papers necessary to go public, except it happened to be on September 10 of all days.

And the next morning, as we woke up and we're leaving to go on our chartered flight, watch the planes fly into the building and knew the world had changed. But Ken was nice enough to stay with us and help us file the papers that lead us to being public this Matador and whatever else we need. He's been the player that plays all the positions. Thank you, Ken.

Now you can give everybody a hand. All right. Now I'd like to invite our co-Presidents, Van Singleton and Bryan Erman, to introduce our officers and staff. Van and Bryan, these are 2 workhorses and Van has been our deal maker, and Bryan is one that's kept us following all the appropriate lines. And it's a long history between us but it's really great to have these capable people. So go ahead.

Thank you, Joe. We like to say at Matador that the secret sauce of the company is our people, and it really is. All the good news that you're going to hear today and exciting things happen at Matador wouldn't happen without the people in this room and the staff that are in the office and the staff in the field. So we'd like to take a moment to recognize the staff that are in attendance today. So we'll start with our Executive Vice Presidents, if our EVPs would all stand, please.

Thank you.

Next, if we could get all of our Senior Vice Presidents to stand.

And then if our Vice Presidents would stand, please.

And last but certainly not least, if all the staff that's in attendance could stand for us.

And I would like to note, while they're not in attendance, our field staff are a huge part of what we do every day. We want to recognize them. They're the people that 24/7, 365 days a year keep it happening. So I want to give a round of applause to them as well because I know some of them are listening.

Now I'd like to invite one of our directors, Shelley Appel, to introduce a few of the special guests in attendance today.

Thanks, Bryan. It's a pleasure to be here today and recognize some of our special guests in attendance. Would each of you please stand as I introduce you? And would everyone please hold your applause until the end. We'll start with Chris Stakem, Rayford High and Derek Burns of KPMG LLP, the company's independent registered public accounting firm for the year ending December 31, 2026, and members of their team. Mr. Stakem is available to respond to any questions you may have for KPMG.

Next, Preston Bernhisel, Sarah Dodson and Rusty Shellhorn of Baker Botts LLP and members of their team. Jason Schumacher and Luke Ohnmeis of O'Melveny & Myers LLP and members of their team; and Mark Shoffner of Bell Nunnally & Martin LLP. Also in attendance are members from our bank group, including David Dodd, Denise Davis and Krishnaraj of PNC and Ford Lakin and Tim Perry of RBC.

Finally, we'd like to recognize a long-time vendor, Forrester Smith from BNL PICO and his wife, Beth, and a long-term institutional shareholder, Hodges Capital. Craig Hodges and Derek Maupin are in attendance and members of their team. So all of these individuals and their teams have contributed to Matador's success over the last year. Would you please join me in a round of applause?

And now I'd like to turn it back over to Joe.

Actually, there's a few more I'd really like to recognize, so I'll be limited, but one in particular is Wayne Gaylord. Can you, right. And Wayne was an officer at one of the banks here, and they were considering an investment, and there was some challenge from the people above. And Wayne put his job on the line, told them to invest -- he did, and it was a lift because we were at $270,000 in capital, and he doubled that to $300,000. So thank you, Wayne.

All right. Thanks, Shelley, and we're a little bit old school, but we do like to know you. So any of you that ever want a tour of our offices in our MAXCOM room, please let us know. We'd love to have you and take you around. I would ask Amanda Crawford after the meeting if you ever want, if you're not getting the investor alerts or if you like a meeting. So Amanda, please. Our Chief of Staff back there that keeps everything running. Thank you, Amanda. She does everything.

Now I'd like to ask Bryan to return to the podium and lead the business portion of this meeting.

Thank you, Joe. This meeting is being held today pursuant to the notice that was mailed to each shareholder of record on April 13, 2026, which is the record date of the meeting. I have made available a complete list of the shareholders of the company entitled to vote at this meeting, alphabetically arranged and certified as of the close of business on the record date. Further, I have provided a notice, proxy statement and proxy and an affidavit that such notice, proxy and proxy statement, together with the 2025 annual report of the company were mailed to shareholders of record as of the record date. These documents will be filed with the minutes of the meeting.

Derek Gabriel, Senior Staff Attorney Corporate and Midstream Counsel at Matador has been appointed to act as Inspector of Elections at this meeting. As Inspector of Elections, Derek will ascertain the number of shares of common stock outstanding and the voting power of each, determine the number of common shares represented at the meeting and the validity of the proxies and ballots, count all votes and ballots and certify and declare his determination of the number of shares of common stock represented at the meeting.

All holders of record of common stock as of the close of business on the record date are entitled to vote at this meeting, either in person or by proxy. Derek, would you please present the attendance report?

As Inspector of Elections, I report that there are present at this meeting in person or represented by proxy, the holders of approximately 115,739,804 shares of common stock of the company out of a total of 124,200,880 shares of common stock outstanding and entitled to vote as of the record date. Thus, the holders of approximately 93% of the aggregate outstanding shares of common stock entitled to vote are present in person or represented by proxy at this meeting. Each share of common stock outstanding on the record date is entitled to 1 vote.

Thank you, Derek. On the basis of the report of the Inspector of Elections, I declare that a quorum is present at the meeting and the meeting is legally convened. A certified report of the Inspector of Elections will be attached as an exhibit to the minutes of this meeting. As stated in the notice of this meeting, 3 matters will be considered and acted upon at this meeting. To expedite the actions taken, all matters of business as reflected in the notice will be presented first, and then a ballot will be taken afterwards for voting on each matter.

The 3 orders of business for consideration at today's meeting are as follows: the election of 3 directors to our Board of Directors; the approval of a nonbinding advisory vote to approve the 2025 compensation program of our named executive officers, also known as say-on-pay, and the ratification and appointment of KPMG LLP as the company's independent registered public accounting firm for the year ended December 31, 2026.

Speaking on behalf of the Board of Directors, we recommend that you vote for the election of the 3 director nominees and for the 2 additional proposals being considered at today's meeting. I would now like to ask Director Monika Ehrman to introduce the director nominees for this meeting.

Hi. Good morning, everyone. Thank you, Bryan. Our directors serve staggered 3-year terms and are grouped in Class I, Class II and Class III directors. The reason for the staggered terms is for the directors to get to know the key members of the staff and the other members of the Board and to visit facilities in the field and to further educate them in the business. The Class III Board nominees to be considered at this shareholder meeting are Joseph Foran, Reynald Baribault and Timothy Parker. But in the true sense of the Matador family, we know them simply as Joe, Rey and Tim.

Mr. Foran founded Matador Resources Company in July 2003, and since our founding has served as Chairman of the Board and Chief Executive Officer. He is also Chair of the Board's Executive Committee. Mr. Foran began his career as an oil and gas independent in 1983 with he and his brilliant wife Nancy, Co-Founder, founded Foran Oil Company with $270,000 in contributed capital from 17 of his closest friends and neighbors.

The impact of that contribution lives through until today, as we've heard in Mr. Foran's remarks. Today, Matador is one of the top 20 exploration and production companies in the country by market cap, listed in Fortune's top 1,000 companies in the U.S. by revenue and one of the top 10 oil and gas producers in New Mexico. As the Founder, Chairman of the Board and Chief Executive Officer of Matador Resources Company, Mr. Foran provides Board leadership, industry experience and long relationships with many of our shareholders.

Mr. Baribault was elected to the Board in 2014 and is Chair of the Board's Operations and Engineering Committee and Prospect Committee. He served as Lead Independent Director of the Board from 2016 to 2019. In addition to co-founding North Plains Energy and NP Resources focused on the Williston Basin in North Dakota, he co-founded and serves as President and Chief Executive Officer of IPR Energy Partners, LLC, a Plano, Texas-based oil and natural gas production operator with current operations in the Fort Worth Basin. Prior to co-founding North Plains Energy, NP Resources and IPR Energy Partners, Mr. Baribault served as Vice President, Supervisor and Petroleum Engineering Consultant with Netherlands, Sewell & Associates in their Dallas office from 1990 to 2002.

Mr. Baribault provides valuable insight to our Board on our drilling, completions and reservoir engineering operations as well as growth strategies, midstream operations and administration. Mr. Parker was appointed to the Board in 2018. He serves as Lead Independent Director and is Chair of the Board's Capital Markets and Finance Committee. Mr. Parker currently serves as a contractor in charge of research for Brightworks Wealth Management, LLC. Mr. Parker retired in 2017 as Portfolio Manager and Analyst, Natural Resources Group for T. Rowe Price & Associates. He managed the New Era fund from 2010 to 2013 and managed the energy and natural resources positions of T. Rowe Price's Small Cap Value, Small-Cap Stock and New Horizons funds from 2013 to 2017.

Mr. Parker's extensive experience with a large institutional shareholder and his familiarity with the capital markets and oil and gas industry provide the company with valuable insight. I'll say that it has been a privilege to work with and learn from these 3 talented individuals. More information with respect to the qualifications of each nominee is included in your proxy statement. The Board of Directors recommends that you vote for each nominee.

Now I'd like to turn the time over to Gaines Baty, Chair of Strategic Planning and Compensation Committee to discuss the next proposal.

Thank you, Monika, and thank you all for being here. We always -- we all look forward to this day when you're here. The second order of business is the nonbinding advisory vote to approve the 2025 compensation program of our named executive officers, also known as say-on-pay as set forth in the proxy statement. Our compensation program is designed to reward in both the short-term and the long-term performance that contributes to the implementation of our business strategies, maintenance of our culture and values and achievement of our objectives.

We believe the 2025 compensation program accomplishes these objectives. More information regarding the compensation of our named executive officers is included in the proxy statement. The Board of Directors has recommended that you vote for the nonbinding resolution approving the 2025 compensation of our named executive officers. And now I'd like to ask Ben Colodney as Chief Accounting Officer, to discuss the final order of business before us today in today's meeting. Ben?

Thank you, Gaines, and good morning, fellow shareholders. It's an honor to be here standing in for Bill Byerley, who couldn't be with us in-person today. I'd like to take this opportunity to thank Bill for his expertise, guidance and leadership of both the Audit Committee and the incredibly talented accounting department here at Matador. He also does a great job fostering open communication and coordination between the committee and KPMG, who has consistently delivered a high-quality team and utmost professionalism over the years.

The final proposal before us today is the ratification of the appointment of KPMG as the company's independent registered public accounting firm. KPMG served as Matador's independent registered public accounting firm for the fiscal year ended December 31, 2025, and has served as the company's auditor since 2014. The Audit Committee of the Board of Directors has appointed KPMG as Matador's independent registered public accounting firm for the fiscal year ending December 31, 2026.

In turn, the Board of Directors has directed that such appointment be submitted to our shareholders for ratification at this meeting. Further information about the services provided by KPMG is set forth in the proxy statement. The Board of Directors recommends that you vote for the ratification of KPMG as the company's independent registered public accounting firm for the year ending December 31, 2026.

I will now turn the meeting back to Joe Foran, our Chairman of the Board of Directors and Chief Executive Officer.

Thank you, Ben. On behalf of everyone on the Board and the Matador staff, we thank you for the rigor and expertise that you bring to the accounting department. You all have been our outside auditor for the past 12 years, I believe. Is that right? And Derek here, who's going to be taking over that, started out. We were one of his first assignments, and it's nice to see they're trusting you with larger and larger assignment.

So it's a group that knows our company well and has responded when questions have ever come up, and we appreciate all the extra work. And the vote on them, of course, and Monika and Gaines, we greatly appreciate all your hard work and expertise in your Board and committee assignments as well as your support for the senior staff in carrying out their task, duties and leadership responsibilities. So the 3 orders of business are election of 3 directors, nonbinding vote on the 2025 compensation program and the ratification of the appointment of KPMG as the company's independent registered public accounting firm for the year ending December 31, 2026.

We will now distribute ballots to any shareholders present who wish to vote in person. Votes and ballots should be cast at this time only if you have not previously given a proxy, if you've revoked a proxy previously given by you or if you are now revoking a proxy vote previously cast by you. If your stock is held in a brokerage account in order to vote this time, you must first provide us with a legal proxy that would have been given to you by your broker, granting you the right to vote that stock. If under these circumstances, you now desire a ballot, please raise your hand, and we will provide you with one. Seeing no hands in the air, we will finish voting with the Inspector of Elections now to work on the ballots and give a report on the outcome.

I am pleased to report that each of the nominees for director has been elected to the Board as each nominee has received at least 95 million votes or approximately 87%, which constitutes a majority of the votes cast by the shareholders present in person or represented by proxy at this meeting and entitled to vote on the election of directors.

The second motion regarding the nonbinding resolution approving the compensation of our named executive officers has received a favorable vote of 105,024,470 votes or approximately 96%, which constitutes a majority of the shares present in person or represented by proxy at this meeting and entitled to vote on this matter.

Finally, the third motion ratifying the selection of KPMG LLP as the company's independent registered public accounting firm for the year ending December 31, 2026, has received a favorable vote of 114,318,225 votes or approximately 99%, which constitutes a majority of the shares present in person or represented by proxy at this meeting and entitled to vote on this matter.

Therefore, each of the director nominees and the proposals voted upon today, as described in the proxy statement has, consistent with the recommendations of the Board of Directors, been approved by the shareholders and will be recorded as such in the minutes of this meeting. We remind our shareholders and other stakeholders that specific information regarding the number of votes cast for or against each proposal will be included in our current report on Form 8-K that will be filed with the Securities and Exchange Commission in the days following this meeting.

Thank you, Derek. This completes the scheduled items of business to be conducted at this meeting and wish to thank all of you, shareholders, either voting in here or by proxy that we're humbled by the vote count, 99%. We couldn't match you as the auditors. There is a lot of confidence expressed in that, but over 90% voting for the directors and some of the highest vote totals voting yes that we've had in years past. And we appreciate that support and we do not take it lightly. Just before adjournment, there were a few people that we needed to recognize. They don't fit nicely in the categories, but one of our original 17 investors, Bob Baty is here today and would like Bob to stand up and you all know him. We call him the brave soul because we didn't know what we were doing at that time.

Bob is a very -- I've been teammates all the way back to first year of high school and really earlier than that. But he ran a very successful construction company buildings all over the Western United States. But we're glad to have him here and part of this. And one of these days, I'll maybe tell you the story of what was behind Bob. But I think he wanted Nancy to be sure that we could afford a baby, I think. So then since I mentioned Nancy again, I do want Nancy to stand and my co-founder, and then also, we have what we call one of our wily veterans, Billy Goodwin, came back to make sure we were keeping the drill bit going to the right and really increased the professionalization of our operating staff and been a key friend and executive with us for 10 years or more. And Billy, good to have you back here.

And then thanks again on the vote count. We appreciate it and we don't take that lightly. Now before going any further on the company update, I'd like to share a video that Rick Alexander, our Executive Vice President of Measurement, made for us about Matador. You may remember the slides he did last year with companied with music. And as I understand it, the drumbeat that you may hear in this movie is really Rick back there, adding some sound effects. Is that true?

All right. Rick, please stand up and be recognized. You want to start your video now.

[Presentation]

If that doesn't rate to name Hollywood, I don't know what else he can do. But great job again, Rick. Well done. All right. Tim Parker.

Hi, everyone. Nice to see you all again. I'm Tim Parker. Thank you for electing me again. I appreciate it. Looking forward to serving another 3 years. And I just want to say that this is a really solid company that we all know, but there are reasons to like it maybe a little bit more than we do currently. And this is a time in our company's lifespan where, no, we can't grow 20% organically anymore, but we might grow single digits. And then we might do some interesting transactions. We did that with a lease sale recently. We're looking at things to do with midstream, catalyze some value there.

We're finally going to get out of Waha pricing next year that we're going to take all our gas east on pipeline options, and we'll know what it costs to get over there and not be worried that Waha will be negative as it's been for much of the start of this year. The fact that we have this strong inventory in an industry that is increasingly short on inventory shouldn't be overlooked either. So it's not just -- it's too simple to say we have 210,000 acres. So many of these acres have multiple targets under each acre. So it's actually many more locations than you would think under this acreage. This gives us easily 10 to 15 years of inventory, probably more than that, more than we need.

I think that will become increasingly valuable over time because the basin is maturing, not for us necessarily, but for many of our peers. So I don't think investors fully recognize the value that we can generate from our assets. And I would also call your attention to Q1 results and keep an eye out for Q2 results because the well outperformance of new wells has been excellent. You don't always see this, and it's hard to do because we don't try to under-forecast wells. We try to put a good number on the page, and yet we're outperforming that, particularly in these wells we've drilled in the last few quarters. And so I think we have good reason to feel like production will be strong and oily for the balance of this year.

Also, you've heard us talk about our balance sheet. We took on a little bit of debt for the lease sale recently. We hope to pay it off in a year or so. Our goal is to keep our debt to EBITDA to kind of cash flow to about 1x in normal situations so that we can flex up for something like an acquisition or the lease sale and then bring that back down to a manageable level of debt. We want to be prepared for the inevitable fall in commodity prices. They may be high today for oil, but nothing lasts forever.

Finally, I'll note that we pay a fixed dividend, and we've been increasing it sharply the last several years. We plan to keep increasing our fixed dividend. This is one of the uses of our free cash flow. We may not grow as fast as we used to, but we pay a dividend now. We hope you appreciate it. We're at a time in the market right now that companies like Matador are not as appreciated as other more financially levered companies. Financially levered companies in energy need this high oil price to survive. And so those stocks are the ones investors tend to focus on.

We're going to survive to the other side, no matter what. We're the sort of companies that will do things to enhance our value over this year and the years to come, and that will generate value for our shareholders, but we may not be the favorites today. And that's because for all the good things we do as a company and everybody in the audience here that does these good things, makes good decisions that turns these assets into cash flow.

All we can do is control our decisions, make the right decisions, do the right thing, make the right transactions. One day, the market is going to figure it out. You just can't overthink it. Sometimes the market likes you, sometimes the market doesn't, but cash flow will catch people's eyes eventually. So we keep growing our cash flow, keep generating value. We're going to keep climbing the mountain. Thank you very much.

Next speaker will be Rey Baribault, who heads up our prospect committees, our engineering committees, a lot of our due diligence on matters and was formerly with Netherland and Sewell. And then he had a company out of Denver that did very well. And so we were glad to get and his expertise to help us make our decisions at Matador. Rey?

Thank you, Joe. Thanks for your leadership, and thank you all for taking the time to attend today. And for those not here, thank you for listening in on the webcast. Speaking for all the directors here, we appreciate the Matador shareholder nation and your interest and support and for all the talented and dedicated employees across the company in the office and in the field.

Matador is well positioned with its staff and unique inventory of Delaware Basin opportunities to drive profitability, increase efficiencies and deploy its capital in a manner to optimize return on investments. Their dedication and motivation are key to creating new opportunities and continuing to build value.

Slide 1 here. In this slide, I'd like to highlight the updated MAXCOM operations center, completed late last year with a larger footprint and improved equipment and accommodations for the staff manning it. Currently, 11 engineers and geologists are on a 12-hour 7-day rotation schedules, providing 24/7 drilling planning and horizontal lateral steering guidance. The original center started in 2018 and has been pivotal to Matador's success in achieving over 470 drilling performance records now in the last 7 years. And that's thanks to the 75 engineers and geologists that have rotated through the center over that time period and to the field staff that executed on these records. Their efforts strive to implement best practices and deliver the best well plans.

Recent advances in 3D seismic processing that the geoscience team is constantly refining, provide the MAXCOM professionals with the tools to look around the corner and plan ahead of the drill bit. The results are compelling with a near 99% in-zone reservoir targeting and the company posting a record 10.5-day drilling record to reach total depth on a 3-mile recent lateral well.

I'll have more to add shortly on the company's long lateral program and the efficiencies and benefits that it's providing. To date, Matador has drilled 34 wells with 3-mile lateral lengths or longer in an average in 2026 of 15.5 days from spud to total depth which is impressive. And as well, the teams have drilled 32 U-turn lateral wells with 2 of them recently being 3 miles in length.

On the next slide, I'd like to highlight here the location of Matador's acreage that you're familiar looking at. And as well, the tracks in green are noting the added BLM acreage from the recent BLM sale in the Ranger and Antelope Ridge areas of the company's assets. So this acreage presents a rare and exciting opportunity serving as a blank canvas for Matador's asset and operating teams to design and execute operated well plans that will extract maximum hydrocarbon volumes at the lowest possible cost.

So the entirety of the acreage positions you see here in these 3 areas totals about 5,154 acres. That's going to allow for future wells to be developed in their respective spacing units without any prior well interference effects or previous reservoir drainage concerns. It also enables the creation of long lateral spacing units in excess of 2 miles and multiple well batches tailored to reduce drilling and completion cost per foot through the use of leading-edge technologies and processes that Matador is well versed at like enhanced rotary steerable drilling systems and Trimul-frac stimulation operations.

By leveraging Matador's unique and robust midstream assets in San Mateo and through its wholly owned systems, the operations group has a competitive advantage to further reduce stimulation costs in 2 distinct and significant ways by supplying treated produced formation water for fracturing operations, which in turn saves on water disposal cost and water sourcing cost for frac supply water and also now by supplying field-produced natural gas, which can power Matador's contracted electric frac fleets with Halliburton and NexTier. And it's my understanding, the teams are looking at possibly sourcing field-produced natural gas for drilling rig operations on the horizon.

So Matador is executing on these efficiency initiatives on its multi-well batch large-scale projects. Notably, the recently completed 9 Wolfcamp wells in what the company is calling their Guss unit with lateral lengths of 3.4 miles, which are the longest in company history that well being -- Guss unit being this track acreage down here on the Texas, New Mexico border. So some of the longest laterals drilled to date in New Mexico, these 9 wells with total measured depths in the 30,000-foot range. So we're here sitting in Hilton Lincoln Plaza just across from the Galleria.

So drilling 30,000 feet, total measured depth and length is the equivalent of spudding your well here where we sit today and drilling to Dallas Love Field. So the teams are doing that day in and day out and successfully doing it and hitting reservoir targets that range from 10 feet to 30 feet in thickness for near 6 miles. That's impressive.

The next slide, I'll hone in on an aerial of this Guss federal unit for the frac operations that were completed earlier this year on this pad. So this slide shows NexTier's hybrid electric frac fleet equipment with a 35-megawatt turbine for power generation, that being this part of the operation here. So NexTier is Patterson's well completions business unit. So between NexTier and Halliburton, those 2 contractors are stimulating all of Matador's wells. So this setup illustrates a remote Trimul-frac operation for a 7-well batch stimulation. So there are 4 wells on this main Guss pad. And if you can see these different colored frac stacks, red, yellow, there's a blue and a white. Those are conveniently color-coded for unambiguous operations to continue on this tight pad.

So in addition, off to the right, these lines you see on the surface are 5.5-inch steel casing lines that connect this fleet to another Guss pad within the spacing unit where 3 additional wells approximately quarter mile away are also being simultaneously fracture stimulated. So recall in a Trimul-frac operation, 3 of the wells are being simultaneously fracked at once, while the alternate 3 wells are undergoing wireline perforating operations.

So in this foreground, this crane equipment is in the process of the perforating operations on 1 of the 4 wells you see here. So Trimul-frac is a strategically planned and prosecuted operation that results in significant saving costs that Matador has championed in the last 2 years. A lot of prep and a lot of effort goes into it. The large silos that you see here towards the back of the pad on an incline hold in total around 3 million pounds of frac sand.

So throughout the Guss federal stimulation operation on these 7 wells, Matador used 10 million pounds of frac sand per day. And another way to equate that volume, 10 million pounds per day and in the spirit of American 250, that volume is the equivalent to pumping the weight of the Statue of Liberty approximately every 5 hours over the entire operation.

The 2 large cylindrical tanks that you see in the back are holding 20,000 barrels, 10,000 barrels each or approximately 850,000 gallons of treated produced water from Matador's operated recycling facility nearby. Throughout the operation, the frac used around 200,000 barrels per day of recycled water, which is the equivalent of cycling 13 Olympic-size swimming pools per day, day in and day out. And on this pad, there's 70,000 hydraulic horsepower of equipment, and that's equivalent to stacking 100 Formula 1 cars on 1 pad to deliver the power and the necessary horsepower to complete this operation.

So the turbine here burned natural gas largely produced from Matador's operations rather than burning diesel. And in total, the frac crew used 340,000 MMBtu, which is a little less than 0.5 Bcf of gas during the operation. And that gas, if was sold, would have been selling into a negative Waha price market. So instead of paying a gas purchaser to take your gas away, Matador was conveniently using it as a fuel source for this operation. So the fleet as a whole used natural gas for roughly 90% of the fuel source on this operation, and that saved around $30 to $50 per foot of stimulated lateral for 9 wells, reaching -- which reduces the exposure to elevated diesel costs as well in the current environment.

So the wells in the Guss unit were originally permitted and spaced to be drilled in 2 separate spacing units with lateral lengths that were going to average 1.7 miles. The land and regulatory permitting teams with working closely in concert with the operations team and with management approval, had the foresight to leverage the team's ability to execute as well as utilize their diligence and experience to combine these 2 smaller units with the state and federal regulatory agencies into one larger unit with allowing for a 3.4-mile lateral design.

So this resulting Guss federal unit development that's actually being turned to sales this week, saved the company $66 million in capital spend than what was originally planned in the original design with 2 separate smaller spacing units. This batch well operation combining longer laterals, consolidated production facilities, the optimized use of Trimul-frac operations on multi-well pads as well as the use of company-operated recycled water and field natural gas delivered a cost per foot basis for this operation that was approximately 18% lower than what the company's average in this area was for the last year.

So this style of innovation, integration and execution reflects how the teams plan to approach the development of the units that will be formed in the BLM acreage for years to come. That will maximize value and return on investment for years to come, as I said. This will contribute in a meaningful way to Matador's continued financial strength and meeting long-term performance goals of the company.

So to wrap up, Matador's quality assets in the Delaware, which is the premium basin in the U.S. and its unique mix of production and midstream facilities with the dedicated, driven and talented staff are creating value, generating high returns and growing shareholder value. As Joe frequently comments, we like our chances. So thank you for your time and attention and interest and support for Matador.

Great job, Rey. That was a terrific presentation. Good morning. I'm delighted to be here. I've been an Independent Director for Matador now 2.5 years. And I thank you for the opportunity to share my views on the company's midstream performance and outlook today. As you know, the great majority of Matador's assets are upstream, exploration, development and production. That has been and continues to be the major focus of the company throughout its 20-year history. Midstream assets include pipelines for oil, gas and water, gas processing plants and water disposal wells and related operations.

And while Matador's Midstream segment is a relatively small component of Matador, about 15% of 2025 consolidated adjusted EBITDA or operating cash flow and a relatively new segment started a little over a decade ago, it adds a lot to the company's overall integrated value. Having a midstream business gives Matador flow assurance to sell its production and provides Matador marketing opportunities and flexibility. Many of the industry's original midstream assets in the U.S. and in the Gulf were built by the major oil companies, not because the majors necessarily wanted to be in the pipeline business, but because having a way to get produced oil and gas to ready markets and not be held captive was and is critical. And onshore in the Permian, natural gas flaring is not an option. So if a producer cannot sell its produced natural gas, its wells must be shut in, which hurts cash returns.

I've been very impressed by how well Matador has grown and operated its midstream and the strategic and capital allocation choices that have been made by the leadership. Midstream has grown as the company's upstream operations have grown via the brick-by-brick land approach as well as sizable completed M&A transactions. Pipeline and plant expansions have been made to take advantage of profitable opportunities to create more cash flow for the overall enterprise. And that means more cash flow can be pumped back into the upstream business that can benefit by higher oil prices like those we are experiencing today.

Matador's midstream growth has been both inorganic through M&A and organic and the same value maximization mindset and operating team culture is evident. Potential challenges have been anticipated and plans developed and put in place supported by other areas of the company to provide the optionality needed to thrive in any environment. Most of the company's midstream operations, as was mentioned, are conducted through its 51% owned San Mateo joint venture with the private equity group, Five Point Infrastructure.

At the end of 2025, San Mateo's system, which is operated by Matador, included natural gas and processing plants with about 340 miles of pipeline and 720 million cubic feet per day of gas processing capacity. Produced water gathering and disposal services with 195 miles of pipeline and 16 water disposal wells with 475,000 barrels a day of capacity and oil gathering and transportation with 120 miles of pipeline and 3 central delivery points with a total of 100,000 barrels a day capacity.

In addition to San Mateo's joint venture majority interest, Matador owns and operates 100% of several other midstream assets, primarily gas gathering pipelines and water handling. Together, the company expects San Mateo and Matador's wholly owned midstream to generate about $360 million of EBITDA in 2026. You'll see from this slide that nearly all of Matador's midstream assets are concentrated near its E&P operations and its existing and recently added, as Rey pointed out, acreage in the prolific Delaware Basin.

Over time, new pipelines, new interconnects and new or expanded gas plants have been added by Midstream to create a spider web to provide ongoing production, evacuation assurance to Matador's upstream. A couple of different points to keep in mind when you look at upstream and midstream businesses and I'd say the first one is debt capacity. Upstream has operating exposure to commodity prices, and its cash flows are much more volatile than midstream.

Midstream typically operates on a fee basis for transportation or treatment under long-term contracts. Midstream cash flows are viewed as less risky and more predictable by lenders. And as a result, midstream businesses can comfortably sustain higher levels of debt than upstream. It's not unusual for an established midstream business to carry debt-to-EBITDA ratios of 3x to 4x compared to upstream ratios, which are considerably lower. This provides an additive source of capital for both segments of Matador to grow.

In December of 2025, San Mateo JV successfully increased the size of its credit facility, commitments from $850 million to $1.1 billion, which also reduced the borrowing rate while also reducing the borrowing rate and adding a new bank. The facility also has an accordion feature to provide additional increases up to $1.35 billion. So lots of liquidity. The second difference between upstream and downstream and midstream is valuation. In the stock market, the equity trading values for midstream are now and have historically been significantly higher than for upstream, sort of more than double.

For example, current gas gathering and processing midstream companies are trading at an 8x to 13x forward EBITDA compared to independent E&P companies trading at 3x to 4.5x. And as a result of the consolidation in midstream that has occurred, there are not very many choices for investors to participate in the midstream equity or debt, and there's a lot of appetite. Since 2015, Matador has built the value of its midstream assets from nearly 0 to over $1.5 billion as midstream throughput and EBITDA rose to record levels in 2025.

Matador's Midstream group has found innovative ways to grow. Examples of smart growth are the 2022 acquisition of the Pronto plant now renamed the Marlan plant and its subsequent contribution for cash incentives and other attractive terms to the San Mateo joint venture in late 2024. And that was a remarkable deal.

Next slide, please. The Marlan plant expansion came online in second quarter '25 on time and on budget, which is no small thing and really not that common, significantly increasing San Mateo's total gas processing capacity. And third-party midstream revenues also increased in 2025, including from working interest owners in Matador's operated wells, diversifying its revenue base.

There are many advantages for Matador to own and operate an embedded integrated midstream business. First, flow assurance for it and its other customers' equity production; second, significant free cash flow distributed back to Matador to grow the company's E&P base and repay debt incurred in E&P acquisitions. Third, good opportunities to add blue-chip third-party customers looking for reliable alternatives. And on this point, in 2025, San Mateo's processing plants achieved an uptime of over 99%. That's right, 99%. The rest of the basins operators were between -- we're in the 80s.

And as Todd pointed out to me today, and sometimes during periods of bad weather or other incidents, there was a 20% improvement in Matador over the others. And that's due to the fact that during periods of bad weather and temporary shutdowns of others' midstream facilities, our staff are incredibly dedicated and customer-focused. And fourth, the added potential to raise capital to use from new sources. Matador continues to carefully evaluate a wide range of strategic options to create additional value for you, our shareholders, in light of the recent positive developments of the company and in the sector. So all I can say is it's exciting times.

I have the benefit to participate in the Board meetings as well as being Chair of the Marketing and Midstream Committee. And what's impressed me the most is the outward-looking perspective maintained by the midstream leaders and staff. Like all exceptional teams, they seek to recognize situations and market patterns that can create tailwinds or headwinds and move nimbly to anticipate and take advantage. Each person brings a unique perspective to help create value. All the teams bring an integrated approach knowing success will need coordinated involvement from several different functions ranging from midstream construction and operation, production, marketing, measurement and commercial dealmaking.

I've spent much of my career at Shell in the sector and Matador's focus on efficient teamwork and continuous improvement has been among the very best I've seen in the buildup and operation of a safe and outstanding value-added midstream business. Thank you for your time and interest.

And now I'm going to introduce Joe Foran, Founder, Chairman and CEO; and Chris Calvert, CFO, to give you a financial update.

Thank you, Susan, and thank you for being a part of the Board, particularly all of your experience and expertise in midstream. It fulfills a vital role. And I'd like to introduce now Chris Calvert, who is our CFO and formerly Chief Operating Officer. Chris?

Thank you, Joe. And I actually get a little sentimental [indiscernible] and Rey's presentation of all the amazing things the operations team is doing and continues to do. But I think Glenn Stetson recognized as the new Chief Operating Officer, I think you will still see a lot of amazing things to come out of that group.

Moving forward, if I can get my clicker to work here or Mac can help me. We've seen this slide. A lot of great metrics on this slide, a lot of growth, a lot of managed growth, maintaining a strong balance sheet. But one thing I'd like to focus on really what's behind this slide. If you look at acreage, we have over 212,000 net acres in the basin that's been built from really a small position back in the very beginning. What's not on here, Rey talked about the federal lease sale of over 5,000 net acres that were acquired in a very strategic manner, in a manner that has San Mateo connectivity that allowed us to ascribe value to this deal from a San Mateo perspective.

Very contiguous, like Rey said, a lot of potential operational efficiencies that come with that and potential reserves that are not accounted for in our numbers. On top of that, we've previously disclosed that Matador has been the first operator to explore a Woodford test in the state of New Mexico. And while drilling completion operations have been done on this well, we are in early time. We're excited what we see. But once again, none of these results, no reserves have been added, no inventory has been ascribed to this potential upside from a Woodford test.

Susan just mentioned the benefits of San Mateo. We have 900 million (sic) [ miles ] of pipe that like we said was grown from nothing. And I think what is behind this slide, and Susan just touched on it, is the uptime from the operations excellence that we have in the field. You hear Joe, he has said kind of the anecdote of people sleeping in trucks and working through winter. What I would encourage you all to do after we break, we have a lot of staff here, take time to listen and talk to them, hear their sleeping in the truck stories because I think every single person as I look into the crowd, we all have one. And I think that's something that's very unique to Matador.

When you think through the idea of sleeping in trucks, it's a cultural idea that Bryan Erman talked about. It's something that comes from Joe, from Van, from Billy Goodwin that we live every day. And I think back, it wasn't very long ago, although I think the gray hairs tell a different story. But I think when I started my career, it was Cliff Humphreys and I, who heads up the completions group to where we met, we bonded. It was the sleepless nights fracking the first wells in Southeast New Mexico, where it would be 2 in the morning, and we would be in a frac van, solving problems, learning efficiencies.

And so I would encourage you to reach out and talk to the staff because it's not an anecdote. It's not a onetime thing to where we were sleeping in trucks to provide uptime during a winter storm. It's something that we live by. And I think, Billy, you will probably call us the spoiled generation that has Starlink and leather seats and Internet, whereas I think for you, it's probably payphones and coins and [indiscernible] or whatever it was. But I think I hope, Joe, Van, Billy, I hope you're proud of something that not only have you pushed, but it continues to be a part of the organization today. And so it's something that is behind all of these slides, all of these metrics. And so it's something that I think we're all very proud of.

As you look forward -- I'll see if I can get it, keep pushing the button, Mac, maybe you can help me here we go. What better way to highlight that belief to live the culture. It is shareholder alignment. And that starts from the top. It works all the way down, like Joe said, 90 members of the staff, 90 members of the staff, that's almost 20%, 25% of the staff with their own money are putting their money where their mouth is. They believe in the story. They believe in the culture. They believe in the future. And I think that's something that's unique to us.

Let alone the 90 people buying, you have the ESPP program that Joe spoke to. I think this slide in and of itself speaks. We go on the road a lot, Michael Frenzel, Mac, Hannah Rhodes, myself to tell the story. And Joe and I have laughed. It's -- you really -- if you had to boil it down to one slide, this could potentially be it. You want to have a management team that is aligned with the story that believes in what it is. And you look this slide shows Form 4 reporters, Board members, executive team, 0 sales, purchases in the green, all of our peers, all of our peers, not only in the red, but magnitudes below where we are.

And so it would be very hard for us if we're on the road selling the stock, selling the idea if we were on the other end of the scale on this spectrum because it would be very hard to say, look, I don't have personal alignment with the shareholders. And I think for us, that's something that we can be very proud of. It's something that we look forward to. You heard Rey, Tim, Susan, Joe, we like the future. It's onward and upward. And so it's a story that we're very proud to tell. So I thank you guys for taking the time to come to this. Joe, I'll pass it back to you for closing remarks, but thank you guys for the time.

Thank you, Chris. And Chris is off to a good start. They're on the road every week. Our landmen are on the road every week, looking for deals, looking for opportunities, and they don't stay in the office. And I think that's a difference. And that sometimes putting up with plane delays and plane cancellations, but they're out there finding shareholders, finding people to do business, finding people to do trades. And I think they all deserve a recognition. We are our landmen who travel every week, would you please stand? Now would our engineers and geologists please stand who put together these prospects.

And our division order and land administration people, please stand.

Right. And in there, I particularly want to recognize Yvonne Hoover. Yvonne, will you please stand? This is the person least ready to volunteer to stand. But Yvonne and I have worked together for over 36.5 years, yes. And we've never lost a lease during that for failure to have the rentals paid or some other mistake. So that deserves a special hand. And if I've left out a group or accounting group, again, does a terrific job. So with the accounting group, please stand.

And one reason I'm asking them to stand is they're all Matador shareholders, too. We have over 95% participation in the employees' shareholder purchase plan. So all of them are taking some money out of their paycheck each time to invest in Matador stock. So I think that's the way we are, and it's working.

And being a public company, I can't say all the things that are going to work, but we've got -- this should be a really exciting year for us, and I look forward to being with you next year.

And finally, all those who have traveled from outside Dallas City limits to come to this meeting, would you all please stand? We'll be around. And again, we are open. If you all want to visit Matador sometime, please do so. And if you've got young kids and they are in Cub Scouts or Girl Scouts and want to have a tour, we'll accommodate them too. We're always looking for future shareholders.

With that, is there -- unless there's a motion from the floor, that concludes the meeting. Anything else?

Motion be made. Seconded. Hearing no discussion, move to immediate vote. All those in favor, say aye. All right. Motion carries. And I just ask all of you to think about coming back next year for the meeting and seeing the fruits of what you've seen up here, everything from what Chris was outlining, we were doing drilling and from Hollywood. So I'm looking forward to his video again. But it's just a great feeling camaraderie, everybody pitching together. And we think we have the best shareholder group.

We appreciate your support and I think we're making progress and that everybody's got ideas and everybody is a shareholder. And so we really appreciate you all and know that -- we've been paying the dividend, and I've discovered that I can write you all the letters, nice letters talking about our progress and everything. But it seems to have more credibility when I put a check in there. And so we reviewed the dividend policy every meeting. And if we -- it's been a volatile business, but if we looks like it's stabilizing and some of these things come through, we'll be raising the dividend again.

We want to be a company that steadily raises the dividend. And if you look at the future revenues, they look like they're in our favor. So I can't tell you exactly when, but hang on. We'll -- the dividend is 3% now. We want to get it to 4%. So thank you all. The lawyers will take me aside and beat me up for making a statement like that. But [indiscernible], you deserve it. You need to know, and I'm hoping you'll come visit me in [indiscernible].

So with that, we'll conclude the meeting and do the follow-up. But thanks again to all of you for taking the time to come, and please know how much we appreciate you.

Good morning, ladies and gentlemen. Welcome to the First Quarter 2026 Matador Resources Company's Earnings Conference Call. My name is Stacy, and I'll be serving as the operator for today. [Operator Instructions]. As a reminder, this conference is being recorded for replay purposes and the replay will be available on the company's website for 1 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 Matador. Mr. Schmitz, you may proceed.

Thank you, Stacy. And good morning, everyone, and thank you for joining us for Matador's First Quarter 2026 Earnings Conference Call. 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 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 earnings release and its most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

In addition to our earnings press release that we issued yesterday, I would like to remind everyone that you can find a slide presentation in connection with the first quarter 2026 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, Mac, and good morning to everyone, and thank you for participating in today's earnings conference call. We appreciate your time and your interest in Matador very much. I've been coming to you for a long time. It's actually 40 years -- over 40 years in time and I unequivocally say that this is one of the more challenging times over that history, but also feel very good that -- our team is experienced enough and our balance sheet is strong enough and our lease position is strong enough that we can meet these challenges.

And I just want to point out to you what I heard over the years, keeping it simple, was to look at 3 things. It's production up? Yes. Our production up, is our capital spending the same or down a little bit. And it's -- and then finally, is your debt down. So we've reduced debt. We kept the lid on capital spending for those and our production is up.

And our balance sheet is in the best position that we've had during this entire time. So we're ready to meet whatever challenges and opportunities as they may come along. And I'd like to say, emphasize the point about the teamwork here. It's continually gotten better and better. And times like this gets everybody working with extra effort.

And over time, we've generally made our best gains in times like this. So we -- everybody wants $100 oil or more, but these are often times that help build the company. And so -- thank you for your thoughtful analyst reports, and we look forward to your questions and want to say again that we're open to you all, we want you all to know you're welcome to come visit us where we will be able to spend more time and you meet more of our people. So ask away, and I turn it back to you, Mac.

Sounds great. Stacy, we're ready for Q&A. Thank you very much.

[Operator Instructions]. And with that, our first question comes from Neal Dingmann with William Blair.

Nice quarter, Joe. Joe, just a lot to ask, but I'll just try to focus my first and only question on production growth. I'm just wondering historically, you all have grown production a bit more than this year. And as you pointed out, there's certainly absolutely no balance sheet constraints when you look at now the balance sheet and everything that you all have.

So I'm just wondering when you all laid out the plan for this year and you think about the growth for the remainder of this year into next year, is it largely influenced by how you see the macro environment? Is it how you all are thinking about the potential incremental capital spend? Or what is the largest drivers behind how you're thinking about laying out the growth?

Thank you, Neal. That's a great question, multifaceted is we're looking at it in all different ways, is that obviously, as variable is this year has been, price of oil is up, war breaks out. One thing has been somewhat chaotic. So we've discussed all those different plans and what we do in each case. And Matador has always tried to be nimble to be able to change plans as the environment -- business environment changes.

And we've been through COVID, and we came out better from that. We've been out, I don't know, all the different crises that you get in the Mid East. We've come out better from that. And that just reflects, I think, the growing teamwork, we're still getting better and better out here. We've got people, we've gotten to know each other really well over the years, and it's really been easy to go down one direction or another.

Presently, we think the emphasis should be on getting production up and your debt down and keeping a handle on your capital spending. You want to spend some capital, of course, to keep growing, but you just don't want to be reckless with it and make each dollar count. And that's been our approach, and it's been a collaborative effort with each of the department heads.

And I can -- if you or others come business and get around the table with us, I think you'll see the interaction and the teamwork and we'll leave feeling confident that this is a group that works together and has good ideas. And in times like this, they can be trusted and they've proven themselves in challenging environments like this and have produced good results. So that's how we've grown from $270,000 in 1983 to the present market cap somewhere around $8 billion.

Neal, this is Chris Calvert, EVP, CFO. The one thing I would like to add to that, and obviously, I think those are great comments from Joe. When we think about growth and the optionality as well that comes with that you have to forward think about potential restrictions or constraints to growth. And I think for Matador, we attack those and we look at those in a very unique way.

The inventory scarcity question is something that's not really applied to Matador. 10 to 15 years of inventory with extremely good returns, 50% or better at different commodity prices, takeaway constraints. We look at the catalysts that Matador has, whether those are our fully integrated midstream business of San Mateo or the Hugh Brinson catalyst that will alleviate Waha -- negative Waha pricing in the back half of this year.

Operational efficiencies that drive capital efficiencies as we think about growth, you want to have capital efficiencies that come with that. And so for us, we think we're in a position to where, when we think about growth, we don't have some of the potential constraints that I think some of our peers are affected by. And so we have that optionality to potentially grow if we want to. But obviously, we're looking at it from kind of the profitable growth at a measured pace standpoint.

[Operator Instructions] Our next question comes from Scott Hanold with RBC Capital Markets.

Good quarter. I may actually kind of keep on the same line as Neal's question. And look, you guys have historically have seen better and better efficiencies in your operations and have pulled forward activities. So as you look at the balance of this year, what is the opportunity to kind of continue that trend of pulling things forward and how much more could that add to your growth this year without like impacting capital too much?

Yes. Scott, this is Chris Calvert again. When we look at it, if you look at the first quarter, the outperformance of the first quarter, the production outperformance itself was buoyed by and it helped with outperformance of wells that were turned on line in the quarter. Then you also had acceleration of activity. There were 2 additional net wells that were turned on in the quarter.

The efficiency story that drives those results will play out through the remainder of the year. And so while we did not increase our full year turn-in-line count, you can go back to the tail end of 2025, the operations team working hand in glove with the midstream team, flow assurance that it provides.

We were presented with the opportunity at the back half of last year, the option to accelerate activity at favorable oilfield service pricing. And so we made the decision to do that. And so that seems to be historically operationally how we view the world. And so as efficiencies continue to present themselves. There's likely going to be the opportunity to potentially pull wells into the year. But right now, it's just a little too early to kind of make that judgment.

So I think for us, we're focused on the production growth that we can from well outperformance and then incremental production growth that is on the back of efficiencies, which comes in leading wells faster into the quarters.

And one other thing is we're opportunistic about acquisitions. The lease-by-lease, brick-by-brick approach that we've talked to before and whatever else there are deals coming down the line, we just try to be careful to be sure that, as Chris said, is that it's profitable growth at a measured pace.

Our next question comes from Gabe Daoud with Truist.

I was maybe hoping, Joe, could just get an update on your thoughts around San Mateo, another good quarter out of that entity. And just curious how we should think about any type of strategic options for that asset this year?

Gabe, that's a great question, too. And as we give that a lot of thought, the midstream has turned into a very valuable asset, not just in money terms, but also in providing us with efficiencies and flow assurance out there in the basin, but sometimes that can be difficult. So it's been a great asset.

Obviously, one thought has been is to take it public, although we can't really say that, but we're not trying to tempt the market. It's just -- we don't want to go out unless it's a good time. We don't need the money, but it's an important catalyst for us because it's grown in our -- some of our [ literature, ] you can see how many miles of pipeline that we have. It's flowing water, gas and oil and have given -- provided great flexibility to our operating group to be sure we get our product to market.

The Hugh Brinson deal that we've discussed is an excellent example of what it's done for us. When Waha has had so much negative pricing, the Hugh Brinson is coming online and moves us away from the Waha market, which is negative over to Henry Hub. And we think it may make as much as $0.50 MM difference and multiply that by the number of the gas production we'll have this year, and it's an enormous difference, and we're very excited about that and getting to work with ET.

I think they've been a top-notch operator, very innovative and that we're -- we see that as a great relationship with each other that can continue to expand. And we have other good partners that have been midstream that will give us other opportunities as our production in the Delaware is all around the Delaware.

And it's not in one location or one field, but it's now throughout that basin. So we think we're set with a property set, takeaway capacity, experienced rigs, experienced people that this is our time to continue to progress. You want to add anything, Chris?

Yes. I think the one thing I would add to that, Gabe, the one thing with San Mateo and the Matador wholly-owned midstream assets, the strategic value of those as they pertain to the Matador E&P upstream side is the flow assurance and really the operational control.

We talked in the first quarter release at length about the efficiencies on the upstream side that come in partnership with the San Mateo and really just the midstream business that resides here in Dallas with us. You can talk to water recycling, whereas 30% of the volumes of the Matador E&P recycled water volumes that we used in the first quarter came from San Mateo or Matador wholly owned midstream assets.

We're actually increasing an investment. We're building a new water recycling facility, began construction this quarter that will assist and continue to grow both the upstream side from a CapEx savings perspective, but also a revenue side on the San Mateo side.

From a gas use perspective, field use gas has been utilized in Southeastern Lea County with a lot of Matador operations that we talked about that mitigates diesel spend. And so the flow assurance and the operational control is something that we are going to be focusing on as we continue to analyze the drop-down for further strategic alternatives with San Mateo.

But first and foremost, it's that integrated business that we want to make sure we're thoughtful of because, once again, we don't need the cash. We just -- we want to find the right deal, specifically the right deal that increases the value to the Matador shareholders to where we can pull that value forward.

And Gabe, this is Glenn Stetson. I would just add on to what Chris said in terms of the use of field gas. And so we highlighted in the release, but by using field gas as opposed to compressed natural gas that is trucked-to-location for frac, we save an average of $100,000 per well. And that advantage is in large part due to our relationship with our unique relationship with San Mateo and Matador's midstream company.

And in Q1 and today, where prices are negative, in addition to those $100,000 in capital savings, we are burning that gas in the field for hydraulic fracturing operations as opposed to selling them at what negative Waha pricing.

Our next question comes from Zach Parham with JP Morgan.

One thing you mentioned in the release is that you drilled your first Woodford well. Could you give us a little more detail there? What are your expectations on that well? And maybe could you talk about what the inventory opportunity set could look like for the Woodford if that well does prove to be successful?

Zach, this is Chris Calvert again, and I'll pass it over to Andrew Parker here in a second. But I think expectations of this well, you can look at surrounding offset production. We have -- we have strong, encouraging expectations that this well will come on from a hydrocarbon perspective, operationally.

Things are moving right along as well has been successfully drilled and cased with completion operations ongoing. From a productivity standpoint, we can expect to discuss this probably on the next call in July. But I think I can kick it over to Andrew Parker here to talk about some of the geosciences.

Yes. Thanks. This is Andrew Parker, EVP of Geoscience. Thanks for the question. We're really excited about the Woodford. This is a huge catalyst for us this year. And the land team has really done a tremendous job putting this position together. But more importantly, the whole team has really just done a tremendous job executing on this first well.

So we're excited about it. It's still early, but we like our position. We like our chances here and we're looking forward to reporting more later in the year, but so far, so good.

And Zach, this is Tom Elsener. I'd just like to remind everybody that we haven't currently counted any of the Woodford in our inventory today. So that would be the upside if we get success there.

Either in the reserves or in the lease position, it's just been done.

Our next question comes from Phillips Johnston with Capital One.

I wanted to ask about your quarterly CapEx cadence for the year. Your second quarter guidance implies you spend around 55% to 60% of the budget in the first half of the year. So I wanted to get a sense around the shape for the second half. Would you expect it to be fairly ratable at a little over $300 million in both Q3 and Q4? Or is 1 quarter significantly safer than the other?

Yes. This is Chris Calvert again. Thank you for referring back to the first quarter. I think the 55% to 60% that we -- guidance that we put out with the February release, first quarter, where we came in the first quarter of $428 million was right in line with what we expected. The second quarter midpoint. If you put those 2 together, it puts us right in that 55% to 60% range. And so the first half of this year, the capital spending is exactly in line with what we told everyone.

As you look at the back half of this year, it definitely steps down from where it is on a quarterly basis. We haven't really put any sort of forward messaging to it. But you can look at whether it's TIL cadence, over 50% of our TILs are occurring in the first half of this year. So you would expect a sizable drop in the back half of this year. But once again, as efficiencies shift, I think it's a little too early to put any sort of capital cadence to the third and the fourth quarter other than they will be down from the second quarter number.

Our next question comes from Paul Diamond with Citi.

I wanted to touch base on your -- is the improvement D&C per lateral foot. Can you talk about the levers you see available in the next coming quarters and I guess the trajectory here getting down to that sub-800 level?

Yes. This is Chris Calvert again. And I think the range we put forward at the beginning of the year, $785 to $805, 6% down from where we were in 2025. And I think as we look at the levers to maintain and finish towards the bottom end of that range target for the year, it's a lot of the similar levers that we have spoken to in the past. It's multi-well completions, utilization of simul- and trimul-frac.

It's the full utilization of electric fleets with 90% reduction in diesel usage, continued water recycling usage and improvements in water recycling in the first quarter of 2026, we recycled over 70% of our water came from recycled sources.

And so looking forward, how do we continue to push that? It's drilling and completing wells in shorter cycle times. Year-over-year, we're about 13% faster just on average from cycle times. But I think the really impressive parts of this are in the deeper parts of the basin, as we extend laterals, the improvement grounds that we have made.

And so if you look at 3-mile well laterals, for example, in 2025 versus 2026, our best 3-mile well we've drilled this year in under 16 days, which was a 40% improvement versus 2025.

And so I think as we look at levers going forward, it's going to be reduced drilling times, increased use of recycled water, vendor relationships, AI integration within certain operational processes, MAXCOM integration, our MAXCOM room here, we're in our eighth year of MAXCOM, continuing to see improvements, continuing to see records broken, 3-mile U-turns. I think the laundry list is long of levers on how we can continue to improve upon that number.

Our final question this morning comes from Phillip Jungwirth with BMO.

One of the other Delaware operators this week was talking a lot about AI and just wondering how is Matador either implementing or looking at this in its own operations to enhance efficiencies on the production optimization side or also help on the drilling and completion side?

Phil, that's -- we kind of gained tackle that around here and it's coming contributions to executing a confident AI program is coming from different people. It's a committee working together. Glenn Stetson is somewhat the leader and Jordan Ellington of that. And the effort is to understand it, think about applications. But again, to make sure they're not missteps and that people as you go in a controlled organized fashion with the group working together, it builds confidence. So we're trying to learn at a measured pace, too. And I think Glenn can give you more specifics, but we see use of it.

But again, you want to build confidence if you put to use and it fails in some aspect of it, you get people that might be leery. So we want to go slow but sure and make sure it's practical and fits in with what we're doing. It's pretty remarkable. But I think it's like any tool, you've got to be careful and be sure you understand its use. Glenn?

Yes. Phillip, just Joe said it, I think, nicely. We're continuing to increase our integration of AI-driven analytics and pretty much every facet of our operations. On the production side, we've looked at this, and we bring in over 40 million data points a day. And we have a control room that is monitoring those data points, along with our field staff in real time. And the goal for us is to make those actionable and help to reduce downtime and identify inefficiencies so that we can address them as quickly as possible.

On the completion side, similarly, activating in real time monitoring what the hydraulic fracturing operations, the pressures, the volumes that are coming in from water side and from the sand side on the -- even in terms of logistics, I think, is helping us out greatly as we expand the use of simul and trimul-frac all of that becomes paramount.

And then on the drilling side, Chris mentioned MAXCOM, we said over 36 records just in this quarter in different hole sections and into lateral using AI to help target in the lateral to make sure that we're not just in the preferred target, but in the preferred portion of the preferred target and making sure that we can drill faster that ultimately, you put it all together and we get the results that you saw in Q1 that we hope to replicate and continue to replicate get better.

Yes. I think you all have done an excellent job, and I'd like to stress that the committee is made up from people all departments not that everybody in that department is still, but there's a representative from each of the departments, so that their recommendations are backed by a whole team, and they've been working together in a very nice way, monitored by our Board.

And we're optimistic that it's going to have an application, more so in some areas than others, but it's for real, but you just don't want to make a bunch of mistakes as the caution and have the staff lose confidence in the work that it's doing. So I'm very pleased. I think the whole management team, Dan and Bryan are all same view as others that this is -- this can become a very important tool for us going forward. Bryan?

No, I think that's right, Joe. I think we're taking really, really proud of the approach we're taking to this. We're being methodical about it. We see the benefit of it. And as Glenn and Joe talked about, we're seeing real applications that we're able to get real value from. But I think as Joe said, we're going to be fast followers on this. We're not going to jump in and make a bunch of mistakes. And so I think we're taking the right measured approach with it.

Thank you. Ladies and gentlemen, this ends the Q&A portion of this morning's call. I'd now like to turn it over to management for any closing remarks.

Thank you very much for that. And I do want to encourage the people that are listening, if you have follow-up questions to please call Mac Schmitz here at the office. And Mac, give me your number.

Yes, you can reach me at the Investors inbox, which is [email protected] and the phone number is 972-371-5225 and we're always available.

And second is, if you're here in the area, come by. We are a public company, and we like meeting our shareholders. As you know, we began not through private equity, but through friends and family, and we try to keep perpetuate that feeling even today that we like knowing our shareholders and like all of the owners and to be sure that you know that we're putting your interest first and want to invite you to our annual meeting this summer.

And I think we have a display of equipment that when you get to see the drill bits that we're actually using and meet the young engineers and geologists that have led this to a successful program. And same thing on our completion activities. I don't think Cliff gets enough attention on those, but has done an excellent job of continuous improvement of our fracs, working closely with our vendors on that and their research.

So we think that some of this that you get to see the industry has made great strides over the last 40 years. And when they see pictures of me on the first year out there in the old Kelly rigs, the drilling engineers think I was driving a model T or something that. But the industry has made a lot of progress and still making a lot of progress.

So I think our outlook is very good, and we take a team approach on all of this. So if you have other questions, call in Mac, and we'll try to take care of you.

Back to you, Stacy.

Ladies and gentlemen, thank you for your participation today. This concludes today's program.

Good morning, ladies and gentlemen, and welcome to the Fourth Quarter and Full Year 2025 Matador Resources Company Earnings Conference Call. My name is Marvin, and I'll be serving as the operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay reprices, and a replay will be available on the company's website for 1 year as discussed in the company's in press release issued yesterday.

I'll now turn the call over to Mr. Mac Schmitz, Senior Vice President, Investor Relations for Matador. Mr. Schmitz, you may begin.

Thank you, Marvin, and good morning, everyone, and thank you for joining us for Matador's fourth quarter and full year 2025 earnings conference call. Some of the presenters this morning will reference certain non-GAAP financial measures usually -- regularly used by Matador Resources in measuring the company's financial performance. Reconciliations of such non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP are contained at the end of the company's earnings press release. 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 earnings release and its most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

In addition to our earnings press release yesterday, I would like to remind everyone that you can find a slide presentation in connection with our fourth quarter and full year 2025 earnings release under the Investor Relations tab on our corporate website.

And with that, I would now turn the call over to Joe Foran, our Founder, Chairman and CEO. Joe?

Thank you, Mac, and thanks to everybody who's listened and has taken the opportunity to anticipate in this conference call. The first thing I do really encourage you to look over the slides, particularly if you don't have time to read the whole press release that we had. There've been a lot of thought put into those slides to try to make important points that I believe are essential to the Matador story. Second, if you also do not feel you've been given an adequate opportunity to ask questions, we want to invite each of you to come visit us at our offices, where we will make sure that you're giving all the time that you want to ask your questions and get your answers. And in particular, we would invite if you do come, we will make sure that you get to have lunch with the executive team or most of the executive team that's in town, or if you'd rather -- we will arrange for you to meet or have breakfast or launch with a lot of our young leaders and get to know the people who are coming up and being pillars of support and activity and are just doing a wonderful job, great job in directing our various activities. And of course, they're, relative -- have some years of experience, but they're the ones who are actually on the job and the first level of supervision and executive action, which none of the seniors will be in there to give you that opportunity to get some very frank responses. And that invitation goes and just work through Mac to setup such a meeting.

Then what I wish to emphasize today in this conversation is the quality inventory that we procured over time, particularly in the Delaware, where I've been -- I started Matador over 40 years ago, 43 to be exact, and that's where we started out in the Delaware. So we've got reflect -- over 40 years of experience and still think it's the best rock in the country. And we like the position that we built. It's now over 200,000 acres. And if you're going to -- my experience, having started the company is when you're in what you feel is the best rock. It's a lot easier to build than trying together some of these outlying area. So feel free to ask whatever tough questions you want on the inventory, I think our position stands out against anybody acre for acre.

Second, is I hope you'll note the strong balance sheet that we have and that this past quarter, we increased production. Most importantly, we increased reserves by 9% as measured by the Netherlands and Sul. So we have a -- we increased production and reduced debt. And we had strong cash flow throughout even though prices went up and down throughout the last 90-day period. We believe this inventory balance sheet, the strong cash flow, all lead to growth optionality. And with San Mateo, we now have flow assurance outside the basin. Hugh Brinson has been a change maker for us, and we're excited to work with Energy Transfer on that opportunity.

And with that, we'll take the questions. Mac?

So great. Thanks. Marvin, we're ready for Q&A.

[Operator Instructions] First question comes from the line of Lauren [indiscernible], Bank of America.

This is Noah here. So you guys increased sort of net undrilled lateral footage by 2% this year. I guess -- what was this delineation or a result of your brick-by-brick land strategy? And where these locations -- where were these location adds? And you also had some pretty significant inventory adds in the Avalon, third Bone Spring Carbonate and Wolfcamp D. Are you seeing something that you like from those formations?

First, I'd just say. It was a lot more than 1 question. So which one of those do you want Tom to answer?

Really just if you could, on the inventory adds, if you're seeing anything you like on the Avalon Third Bone Spring or Wolfcamp D?

Sure, Noah. This is Tom Elsener, EVP for Reserve Engineering. Definitely appreciate your question, and it's something we're very, very proud to answer. I would say the production out of the Avalon in particular, has been very strong. I think we highlighted a particular well in our kind of Southern Ranger area to a bit [ Gavilon, ] a very strong upper Avalon well that has been a very, very high performer. I think it's getting close to made over 400,000 BOE, very high oil cuts. It's something that we have a lot of running room in that part of the basin for. It's something that we've expanded our inventory in over the years. So it's something we see as it's been a big part of our campaign out in the Delaware Basin. The other zones, various adds all throughout the position is what I would say. I'm proud that you noted the increase in footage. Our teams have been very busy doing trades, extended laterals, and we're very proud to see the 6% increase in our average lateral length in our inventory from 2024 to 2025. We've noted that we've been doing some 3.4 mile on laterals, particularly on our Ameritiv acreage that have helped us to dramatically increase our [indiscernible] length. And I think that, that's something that I would tip my hat to Chris Calvert and all the operations teams for pushing our lateral lengths out to these types of distances and doing it very, very well. I think our teams have been able to improve the quality of our inventory through good geoscience support from Andrew Parker, identifying -- you mentioned the third month in carbonate was a zone that we had not originally included in our inventory several years ago, and it's one that we've drilled very successfully kind of all throughout our Delaware Basin position. Our teams had started with that target down in our Wolf area many years ago and then further north into some of our properties over in Ranger and then over across into Rustler Breaks, and it's been one has been a great add to our position.

Our next question comes from the line of Neal Dingmann of William Blair.

I'll make sure to keep the one question. I don't want to get in trouble.

Neal, the other thing is what maybe some of the others on the deal, you know the way to our office. And you've been here a number of times asking these questions, and we've always appreciated. It's been a very useful dialogue and the guys like [indiscernible] me come and ask you various questions. And so they're hoping you'll come back.

That you all have been very generous with the time, Joe. I definitely look forward to getting back there soon. Joe, my question to you, Brian. It's really just on the '26 plan, it seems you continue now to target free cash flow over production growth. You look this year, great plan out there for 3% oil growth with 11% reduced capital spend. This is -- I compare this to prior years, where maybe you were targeting higher production growth. So my question is, you all now believe, I know you talked about value creation being sort of the key driver out there. You believe the key to the value creation is just this capital and operational efficiency, or what do you all look at as the key for this value creation?

Well, it's a good question, and it's a fair question. The way we do things, as you know, we like to collaborate with each other and several of us kind of lean one way and others lean another way on what's important. And then when we roll that all together, it comes out that I think it depends on the time, and what the nation's economy is to in political situation is which one you lean perhaps [indiscernible], what interest rates are. And so there's a lot of factors that go into it, as you would guess, just like what what sector of the economy would you invest in. It varies from year-to-year and time to time. But our first -- we began with first saying is look for the good acreage because if you have the good acreage, banks generally have a good outcome. And it's hard to turn bad acreage into profitable or highly profitable wells. So beginning with is this a well that's in the right areas and the zone that's been properly tested or is this an exploration in fact well. The other thing is, I lean more towards the long-term reserve growth because when you proved up the reserves, then it becomes optional when do you want to complete wells in those zones and and bring to the market, the -- and you want to do it in a deliberate style because as you drill these wells, the more you drill them, the better your per lateral foot or foot each rate is because you just are drilling them faster, you learned to adapt some ways of increasing your booties and reducing your costs. So last call we had, we were beaten up because we had grown our production, but we had also grown our CapEx and that CapEx was -- we took criticism for that. This quarter, we showed what we could do the capital efficiencies that reduced CapEx spending by 11%. And we were able to recover essentially the same amount of production. But to us, most important because of the fluctuation in prices we increased our overall reserves by 9%. That's not our numbers, but that's Netherland and Sul's numbers. And so we thought that was a good outcome in total for the 90-day period that we increased production a little bit, 1%, but we reduced cost by 11% for the same amount, roughly the same amount of lateral footage and our overall reserves went up by 9%. So we thought that's good, but you all be the judge of it and the market will be the judge of that. But we're pretty excited that we have those numbers headed in that way. Production is up, cost down. And that we proved up some new zones and that we're very excited about. And so with fewer rigs, and I'll let Chris take over from here, he feels what was most important accomplishments for the quarter.

Hi, Neal, Chris Calvert, Chief Operating Officer. Great question. When we look at value creation, specifically long-term value creation, I think the fundamentals of your question really you kind of build the foundation of what we think that value creation is. It's profitability profitability focus, not necessarily production focused. When we look at that, then we try to figure out the ways to optimize the levers that build that strategy. And so with -- on the revenue side, you look at the value of Hugh Brinton as that comes online towards the back end of this year to help improve gas realizations that we spoke to, the production impacts of that in the first quarter. You look at the CapEx spend, the 11% reduction, the $130 million in CapEx savings forecasted for 2026. I'd refer you to Slide 6 to look at our year-over-year improvements in well costs. And really, even more specifically, I would focus you to Slide 19, which I think tells a better story that shows that we're able to achieve these well cost reductions while delivering stronger well results. And so when we can go out and deliver 10% improvements from an EUR perspective and do it at a lower investment cost, I think being able to optimize those levers just continue to improve the fundamentals of that long-term value creation. And so I think it's a great question, something we are hyper focused on the CapEx component of our 2026 plan is something that we are extremely thoughtful to that is going to be underpinned by efficiencies, vendor relationships in these volatile times, and we'll look forward to deliver that plan.

Our next question comes from the line of Tim Rezvan of KeyBanc Capital Markets.

One question. Joe and Brian, we couldn't help but notice the second priority for 2026 in your earnings release was midstream value realization. We also saw your report aggregate San Mateo and Matador Midstream EBITDA guidance for the year. So as we think about the time line, knowing this is a high priority, it seems like a drop in Matador assets into San Mateo seems to be a precursor to anything. So is that something you could do now? Do you need to let the dust settle on the 5-point continuation vehicle first? Can you just kind of walk through the theoretical steps we could be looking at this year?

That's a good one question. Let me try to answer, I was trying to make notes as you were asking that. But no, the limitation of the one question is we're not limiting our time with you all after these one questions you've gone through, if you still got them stay on the line. We'll stay here as long as you want to ask them, and we invite you to come and see us. Now an answer to your question that you're talking about is that we look -- approach this on a very holistic approach. And it's not me sitting in a room and telling everybody else what to do. We gather in here in this room, the same room, we thought [indiscernible], and we cashed out different. People have different views. But when we get through, we all feel like we've hashed out a good plan. And we try to be nimble enough that as the economic climate changes, we'll change with it. And so it's been that kind of a 90-day period in the past, where you had to move cautiously or I felt my 40 years experience out here is be cautious because cautiously, you have a president saying he wants $50 oil, that isn't going to work long term for the industry, needs to go more higher. You've got a world situation where you got the prospect of war in the rand, you've got Europe that we're having difficulties on both sides. I don't like some of the things we're doing. And I don't know who's right or wrong, but I hope they get resolved. There has been a good ally for us. And then in our own country, you have this relations with Mexico, Venezuela, all those different countries that -- so you have the world view, you got to take into account. And so the -- we hedged our bet. We're 50% hedged on oil to protect the balance sheet, no matter which way we -- which direction we ultimately had, but we've taken those precautions. We we've got great vendors. Patterson is always helpful to us on timing of rigs and quality of rigs. So it's a complex, multifaceted, and we get the various department heads in here, and we hash it out, making sure we're taking all this into account. Five Point has been very good to work with. And that simply is a situation that they have an exit period in their fund, and they've got a continuation fund working so that they can work out long term. And that's headed, that's making steady progress, and we expect it to be resolved in the near term. We don't have control over that, but Five Point's been a good partner, and they've done what they've said they would do. And so we're watching that. You got activities, oil is important to the state in Mexico. So you're going to deal with government agencies like the Bureau of Land Management and like the state land office on these matters, and what are their plans, so incorporating that and then we really like our bank group, and they've been very supportive, and we have an RBL. That, of course, has increased over time as we've proved up more reserves, which is something we take in into account and all night in the most recent redetermination by our bank group was that they came back and increased our borrowing base and all 19 were unanimous in their support and even raise the amount that they have been offering on the midstream system. So we thought that was a when the whole way through. Other suppliers, B&L [ Pitco, ] has been very supportive through time, and we'd like to confirm what direction pipe prices are because when you're drilling these longer laterals, you want to be sure you have the best quality pipe at the best prices. So give credit to all of them at Halliburton on our frac designs and execution. So I would say you're not going to make a decision in an afternoon but you're going to gather get everybody's proposals in there, massage them together and go from there. And so it's something that these long relationships that we have with these vendors really pays off because you just -- you really make that time together and planning this that much more efficient. And we think that planning has played a big role in the reduction in our CapEx as well as the efficiency gains and like the timing and the timing that we have in drilling these wells, we're just drilling them faster than we have in the past because everybody knows what they're supposed to do, and they -- people come up with ways to expedite the operation and the drilling plans. Chris, did I leave something out there?

No. I think Joe hit on a lot. And I think to the question, Tim, the relationships we have on the E&P upstream side that Joe has mentioned, I've been long-standing and part of the success story of the operational excellence of Matador. And I think to the story with Five Point and the continuation vehicle, I think what we're excited about is the structuring a deal that allows them to be part of the future growth of the entity. Now as the drop-down conversation moves forward, I think that's something that from the E&P side, we have referenced these 3.4 mile laterals. We've referenced the productivity of the Ameredev acreage that is now in our asset base. And so I think that is an exciting story from both the E&P side and the wholly owned Matador -- excuse me, Metador midstream side, the gathering side. And so I think that the cadence of any sort of drop down, I think that's something that we will continue to work on. But we're excited about the continuation vehicle simply because it's another sign of support from Five Point, and they've been supportive of everything from plant expansions to interconnects between Marlin and Black River. This is just another sign that they want to be a part of the growth story that is San Mateo.

Chris, I think that's excellent. But I just want to add on to that, that we've gotten a number of questions recently about our artificial intelligence participation. And what we found most effective is to work together with our vendors, and where we can use artificial intelligence between us, most often, they have the program. They're ahead of us, maybe more often, and -- but work together, so it's a win-win situation. And -- so we're taking baby steps, but we are taking it in the deliberate fashion with our partners, some of whom have more experience in this area, and we feel like it's other win-win where we all are gaining from the collaboration.

Our next question comes from the line of Zach Parham of JPMorgan.

Can you talk about how you're thinking about using the buyback going forward? It was relatively limited over the last couple of quarters. I know you didn't plan to be formulaic with the boast, but just any chance on how you plan to allocate free cash flow to buybacks in the future?

Hi, Zach, this is Rob Macalik, CFO. Definitely on the shareholder return, we're proud of the cash we've returned in the form of both the dividend and the share buyback. We've raised the dividend 6 times in the last 4 years and are really proud of the 3% yield that we have on that dividend today. We just instituted the share buyback in 2025, and we think it's a really nice extra tool that we have at our discretion. As you can see through the management and employee share purchases, including the guys in the field, we as a management team feel like the stock is undervalued. And so we've been trying to be prudent with our capital, but we do think that the share buyback is a nice tool that we have, that we can continue to use opportunistically and feel like between the dividend and the share buyback are really good shareholder return tools to use. And so I think you'll consider -- continue to see us use that in a very conservative way, but use it when there's a dislocation between our stock price and what the rest of the market is doing.

Our next question comes from the line of Derek Whitfield of Texas Capital.

Wanted to focus on surfactants with my question. Could you perhaps elaborate on the enhanced performance you're seeing in your well results, the degree at which you could expand the program in 2026, and how much of this is baked into your guidance?

Great question. This is Chris Calvert again. So I'll start with the back part we have not made any sort of uplift into our 2026 production guidance plan. So I'll put that out right now. As far as quantifying the successful results, we were excited about the pilot test we did in 2025. We have long used surfactants throughout completions. This is something that, as the technology advances, as we continue to delineate from a subsurface perspective in the parts of the basin that we feel could be more benefited from advanced surfactants. That was kind of the basis of our pilot test in 2025. So we're excited about the early results. As we look into 2026. Once again, no sort of uplift is baked into the production. However, I think it's a little early to speak to the enhancements or uplift other than the fact that we have noticed that it is formation specific, certain formations respond a little better, but I think that could delineate and differentiated as we move into 2026 as we test in different parts of the basin. So stay tuned. We're excited about the '26 plan. Once again, the capital is projected into the budget, but not production.

Our next question comes from the line of John Abbott of Wolfe Research.

My question is really on the Woodford. What is the strategy there? Is your position primarily held by production you're drilling your first well in the first half of this year. You have additional pipeline capacity by the end of this year. Is there further derisking in 2027? How are you thinking about that play?

Yes, John, this is Chris. I can take it again and probably pass it to Tom. We're excited about the Woodford. Obviously, our geoscience team has long looked at deeper parts of the basin. We're excited about we've delineated and have producing wells out of 23 discrete horizons in the basin. The Woodford would be additive to that. And so we have a geoscience team who's long looked at deeper parts of the basin. And I think if you've looked at public data about some of these well results in and around the ZIP Codes in which are being reported. You'll see that there is a nice overlap to what we think is the fairway of this basin that is existing to current Matador acreage on the map. And so we look at this as as additive, and I can kick it to Tom.

John, I appreciate your question on the Woodford. This is our -- this will be our first one in the Woodford. And so I would say our primary objective is to learn as much as we can about the Woodford and all the other zones immediately adjacent to it. We'll be drilling a pilot hole and running logs. And I know Andrew Parker can speak more to some of those things. But we do have a had a nice position over there on the eastern side of the basin where others have had some success further over into Texas in the Woodford. Clearly, we're very excited about it. And so it's something that is -- would be purely incremental to our current inventory. We have not yet awarded any inventory whatsoever to the Woodford. So it'd be a great win for Ameredev. But I'll pass it over to Andrew Parker to speak more.

Yes. Thanks, John. Just to add on to Chris and Tom here. We've had our eye on this. We're really excited about the results in Texas, and we really like our rock in New Mexico. We think we have a lot of running room here. Again, it's very early, but we're excited to share more about the test later in the year. But the Woodford -- it's an important part of the petroleum system in the Delaware Basin, which -- this just adds to our confidence of being in the best basin here and our confidence in our inventory across the basin as well. So we're really excited about it.

Our next question comes from the line of Scott Hanold of RBC Capital Markets.

Can you -- Matador basically built itself on the brick fabric M&A as well as organic growth. And moving forward, it looks like, I think for the industry, the growth rate is obviously coming down as well as Matador. But as you -- what do you see in terms of the way to add values for Matador going forward? And do you see a lot of M&A opportunities left to continue to consolidate?

Hi, Scott, this is Van Singleton, co-President. Thanks for your question. I think you can see from last year that our brick-by-break approach was effective as it has been for some time and 175,000 acres without doing a major transaction that was 690-or-so individual transactions. I think you can count to see us be vigilant to protect the balance sheet, but always look for good opportunities in the future. We try to keep a pipeline of deals coming in, but they need to be the right deals in the right neighborhoods. So many of these are end units we have or adjacent to units that we have to form these longer laterals, and we're excited to see there's still opportunities out there, and we'll continue to make trades that are good for both sides. Again, just like doing the deals with [ EnCap, ] they've been good partners to work with. And we look forward to other deals like that coming up. And if some bigger deals do come up, we'll give them full evaluation and due consideration. But we need to stick to our strategy of protecting the balance sheet and putting ourselves in a position for future growth. Brian, do you want to add to that?

Yes. Hi, Scott, this is Bryan Erman, Co-President, Chief Legal Officer and Head of M&A. Just to pile on to what Van said. I think we have shown that we can grow in different ways. We did the Ameredev and advanced deals in previous years. And then as Van said, we did 17,500 net acres and essentially replaced our inventory that we drilled last year through smaller deals. And so I think that's a differentiator for us that we can grow through the bigger deals, and we do think there will be some out there in the future to look at, but we -- in the years that those aren't there, we can grow through the brick-by-brick approach, and we really do feel like that's a differentiator for Metador.

Scott, this is Joe. And let's put a little bit of this in perspective. I started, as you know, with $270,000 in 1983. And today, we've got over $10 billion in assets. So throughout that 40-year period, the same question has been asked and asked again, do you think you can grow anymore? Has there been so much consolidation that there are not opportunities out there. We've always been able to find opportunities, and I don't really see it much different, and that we think is -- we aim for being better, not just bigger. And in a lot of these situations by going after these areas like Woodford and they fit us very well. I'm not sure it fits a major. They need to be down there where they've got hundreds of thousands of acres and these are smaller, but they've still fit us, and we consolidated that way. And Van and others have an active trading circle where we give up here in their area, and they give back. So those arrangements are working. And as far as the profitability goes, I think we've proven over 40 years that we've managed our money well to reinvest in the right areas. And even at old Matador, we were investing in the right areas there in developing trades. So we've been active in each of these extensions, and we've had merger opportunities, many merger opportunities. But so far, we found -- this worked best to be as we are. We're a little unique in a lot of areas. And one thing is the collaboration with each other in the company as well as with our outside relationships, and a good example of this is working with plans as we have. And we've done some -- they might us [indiscernible] some very good ways to add to production and make sure we're in the right areas and right equipment, what's on pipe, and what's still on trucking. And there's another example is that -- so [indiscernible] about who's the next merger or anything. We try to work on the efficiencies and thinks it worked out pretty well that in 43 years, we moved from one rig and part of the time and having 300,000 new assets, which at the time, caused a lot of money, but not so much today when we're drilling 3,000 feet or more and gain efficiencies there. So the business has changed, but the basics about building relationship, being in the absolute best area you can afford and working trades to consolidate things and looking for the new technology, all that that's same the same thing in sports is that it's not how big your school is, but it's often about how good your people are. I mean you look at University of Indiana hadn't had a winning season or championship since 1800s, the late 1800s, but then they win the National Championship because they got better people. And it's not that we can drive people into coming, but we do have a dedicated group of professionals who try to get better every day. And you've been to our offices often, and Scott wouldn't you agree, it's a very motivated group here that works well together and has kind of a unique culture to it. But I ask that question of you if you respond.

And our next question comes from the line of Paul Diamond of Citi.

Just wanted to touch on D&C in '26 for a moment. You guys guided towards a midpoint of $7.95, talked a bit about cycle times, better land as development. Just wanted to get if you could parse that a little bit on how those improvements are kind of broken out amongst those groups or any other levers?

Yes. This is Chris Calvert. You kind of tailed off on the back end of the question, but I'll repeat it a little bit and then whatever I missed. So you said a little bit more commentary surrounding increased lateral lengths, reduced cycle times that led to the reduction in our D&T cost per foot to $7.95. And so I think, Paul, the first thing I would point to is, when we look at this improvement in D&C cost per foot, it is largely efficiency driven. As we look to -- we've talked a lot about these -- this well batch that sits on our Metador acreage, it's 3.4 mile laterals. We expect to turn in line in the first part of this year. That is contributory to the 10% increase in lateral lengths. And so I think when we speak to the ability to do more with less. And I think that is a standard story that is somewhat spread across the industry being able to drill the same lateral footage or accomplish the same with fewer rig counts. Stories like increased lateral length helped contribute to that. And so when we look at improvements in completion efficiencies, we were kind of the -- one of the first to do [ Simo and Trimofrac ] in the Delaware Basin. It has stayed a large part of our completion story. We've seen completion efficiency improvements of 20% year-over-year as far as completed lateral footage per day, all of which contributes to lowering your D&C cost per foot. And so when we think about cycle time improvements, that it really underpins the ability to turn in line the same net lateral footage in 2026 versus 2025. Do it with $130 million D&C capital savings year-over-year. And then also still be able to deliver moderate production growth in the form of 2% or 3% oil -- organic oil volumes. And so I think the underpinning story to the $7.95 number is largely efficiency driven, focused on, like I said, longer laterals and reduce cycle times.

And our last question comes from the line of Philip Jungwirth of BMO.

Was hoping you could talk about the better wells for less money slide. And just what I was really interested in is, first, the forecasting of EURs and the bottom-up build here and then just second, the footnote around excluding wells drilled by Metador or Advance and whether this has been a drag on historical EURs and if Matador designed wells are demonstrating improvement across this acreage.

Philip, it's Tom Elsener, EVP for Reservoir Engineering. I'll take the first part of that one. What we're really proud of is the continued improvement in our well productivity over these years and really highlighted by our own operations and showing that how we've been able to improve our [ ViO ] per foot of lateral year-over-year. It's something we're really proud of. It's not something that just comes very easily. It comes from a combination of improved targeting, improved spacing, improved completions, many of the different operational improvements that Chris has been lining out, but also from our geoscience teams finding better places to buy acreage, better places to land the wells. Combined with the approximately 25% improvement in cost per foot over these years, there are some very big improvements to the rates of returns to the quality of the inventory. And we're certainly very proud of the Emeritus acreage and the advanced acreage. And those have been great acquisitions for us. As has been mentioned on the deal front. We've been very successful with big deals in the smaller brick-by-brick transaction. So Matador has improved its portfolio over the years through the wide range of different techniques.

If I tag on to your note, Cal, it's just that, as an example of this, of these efficiencies, it isn't just it makes the well better, but it's generated additional cash flow that we've been able to pay down our debt. And last year, for example, we paid it down by $200 million. So we were getting our leverage ratio down there to about 1, which gives you more options having that kind of balance sheet strength. And so we tie those together in our discussions that I mentioned when we collaborate what does this mean.

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.

Well, I'd just like to say if anybody else on the call doesn't feel that they got your questions answered, please give a call in to Mac, and we'll arrange a separate conference call. But we want to make ourselves available to you because we think there's a lot of good progress is being made, and we're very excited about some of these new areas that we're developing. It's just hard to always fit it in a 90-day period. But as this year goes along, I think you're going to see why we are as optimistic about the year as we have been, and hope that oil prices will stabilize and that some of the disruptions will be settled over time. And the economy will remain strong. But I give much credit to this team has continued to grow and work that much better together and reiterate our invitation become seeing and meet the people in person that that have a direct effect on the value of the company and then meet some of the younger people because I think they have done a very impressive job.

With that, I want to be sure and give a shout out to Glenn Stetson, Glenn, and then called on the say much, but he's watched over both the production and the midstream and kept both of them running even in bad weather and other times. And so Glenn, if you want to say anything, please do so now. And if you want me to ask you a question first to give you a structure to do that. But you're watching over those two very important areas have got work together, the production and the midstream.

Yes. Thank you, Joe. This is Glenn Gtetson, EVP of Production, I think Tom and Chris both gave examples of of things that we're doing on the efficiency side. I would like to provide an example of where both Matador, San Mateo, and on the completion side, the production side and the midstream companies that work together to achieve some of those efficiencies and one of them is on the produced water side using hydraulic -- using produced water for hydraulic fracturing operations. In 2025, 72% of the water that we used was was produced water, and that has the benefit of both reducing our CapEx per foot, but also reducing our lease operating expenses, and we couldn't achieve those results without the help of San Mateo and Matador's midstream -- wholly owned midstream properties or assets. And so I just wanted that just another area of where we are working together to help on all fronts.

And trying to help the flow assurance, the importance of flow assurance into perspective, is if you're going to -- as I often heard, some of you've heard me say, if you're going to be a cotton farmer in Dawson County, Texas, you better own -- also try to own part of the cotton chain because you got to genuine cotton before it hits the market. And it's the same thing. After we produce the gas, it's got to be collective midstream entity and then take in the market. So we started in on that view when we went public, when first Matador public back in 2012 that it was important over the long run that have an interest in the midstream to be sure you have flow assurance. And that's delivered a lot of benefit to us through time. Now we're not cotton farmers, but I believe it's an apt analogy.

Marvin, with that, that concludes our closing remarks. Thank you.

Ladies and gentlemen, thank you for participating today. This concludes today's program.

Good morning, ladies and gentlemen. Welcome to the Third Quarter 2025 Matador Resources Company Earnings Conference Call. My name is Jonathan, and I will be serving as the operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes, and the replay will be available on the company's website for 1 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 Matador. Mr. Schmitz, you may proceed.

Thank you, Jonathan, and good morning, everyone, and thank you for joining us for Matador's Third Quarter 2025 Earnings Conference Call. 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 the 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 earnings release and its most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

In addition to our earnings press release yesterday, I would like to remind everyone that you can find a slide presentation in connection with the third quarter 2025 earnings release under the Investor Relations tab on our 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, Mac. It's good to talk to everybody again. We think we've had a heck of a quarter and really pleased with our process in all of our different areas and the progress, and we're going to try to go around the table so you can hear directly from a lot of the people doing the actual work. And -- but I think they've just done an outstanding job to date, and we're particularly excited on this quarter because any time you get to raise the dividend, you generally get a lot of adds from some -- from your shareholders, particularly the rank and files shareholders, but also pleased that recognized by the Dallas Mort News is one of the larger companies in the Dallas-Fort Worth area.

But the nicest part of the deal is that when you do the calculations, we are -- although 36 in size, we are #1 in profit per employee. So give a lot of credit to the staff and their contributions and look forward to this report. And I know everybody is interested in knowing about capital spending and the thought processes behind that. But I would tell you, if I were faced with the same situation, we would still spend this money just as we did this year.

I think the teams really worked together on that and the Executive Committee of the Board and the Executive Committee of the company all went through this and said not only about this quarter, but setting up next year is going to be one of the most fruitful years we have as we have lots of inventory, lots of cash flow and good liquidity and room on our RBL.

So ask away, I might turn it over to Chris, our Chief Operating Officer, just to describe some of the thought and process that we went through before deciding on this capital structure.

Yes. Thank you, Joe. This is Chris Calvert, Executive Vice President and Chief Operating Officer. Thank you, guys, for taking the time to be on the call. And really, I'd like to take a few minutes here to highlight the positives of what was written in the release last night surrounding the capital program and really focus on 3 things that I feel were probably maybe overlooked. First, I'd like to talk about the underlying economics related to the projects that came into this capital plan. Specifically, we mentioned 12 additional wells that were going to be brought into the 2025 program.

To highlight these wells specifically, these wells are in excess of 50% rate of return, 1 million BOE wells, half of which of these fourth quarters we're going to be talking about are in Antelope Ridge, which is what we talked about, some of the highest EURs, not only in our company profile, but also in the basin. And so really strong projects associated with this capital plan. Secondly, I think it was somewhat overlooked or taking for granted the advantages and the efficiencies that have been made at the well cost level. We initially came out in 2025 and guided to a midpoint of $880 per completed lateral foot.

We've since revised that number down to $835 to $855 with a midpoint of $844. And as we turn on -- we expect to turn on roughly 1.2 million net lateral feet this year, that $30 to $45 savings equates to about $50 million to $60 million in capital savings. So not only are we turning on extremely economic projects, we're doing it at a lower well cost level. So our initial investments are actually reduced, which in turn helped the economics of the wells. Thirdly, talking about the accelerated operations, I've already spoken to the 12 wells that we accelerated into 2025.

We will also have a positive springboard looking into 2026 with 13.6 net wells that will be turned on at the beginning of January. And so as we look to that, that's going to provide extreme positive momentum going into 2026 to achieve 2% to 5% organic growth rate of what we feel is somewhat of an inorganic growth rate in 2025. And so I think when you consider those 3 things, the economic -- underlying economic returns of the projects, the reduced cost at the well level and then the positive momentum leading into 2026, I think it leads to a very strong report and a positive outlook for 2026.

Yes. And this is Rob, CFO. So I just wanted to pile on a little bit to what Chris is talking about. So even though I'm CFO today, I've been Chief Accounting Officer for the past 10 years, and I've been sitting here at this table with this management team, and we're really proud of what we've accomplished and created in a consistent manner over those past 10 years. And so I think, one, just to bring in an accounting metric, we've gone from accumulated deficit as early as just 3.5 years ago to, for the first time this quarter, over $3 billion in retained earnings.

So that strong balance sheet, and I'll refer you, we have the slide deck out there. I refer you to Slide 11. I think it highlights the strength of our balance sheet with a 0.4 leverage ratio. Over the past year, we paid $670 million of our revolving debt and have about $2 billion in liquidity. So that allows us the flexibility to take advantage of opportunities like what Chris is just talking about. And so really excited about the well returns and the results that we've had so far this year. And like Chris said, feel like that sets us up really nicely for 2026. So -- and at the same time, we're able to accomplish the other priorities that we have for free cash flow. We -- as Joe mentioned, raised our dividend by 20% this quarter.

Land spend, we continue to add on to our land position when we can find the accretive deals that we think make sense for us. And -- we don't need to do anything, but we have a really good, strong inventory of greater than 50% returns even at $50, as we mentioned in the release. And then the last kind of piece of that is the opportunistic share buyback. The management team are buyers. And so the company is as well. But overall, I think we were able to hit all those priorities this quarter, like Joe said, had an excellent quarter and really excited about how this sets us up for 2026.

Jonathan, with that, we'll turn it over to Q&A.

[Operator Instructions] Our first question comes from the line of Neal Dingmann from William Blair.

Nice to see another nice quarter and solid outlook. Joe, my question is really for you or Chris and the team, just on the op efficiency, something you were just getting at with the capital spend. I'm just wondering, as you all continue to see the improvement, I'm just wondering how do you all decide between continuing potentially with the same capital spend and likely increasing production growth or maybe continuing with the same production and decreasing capital spend? Is it one or the other? Or how do you all make that decision from a higher level?

Neil, thanks for the question. It's a good question, and I wish I could give you an easy always answer. But it's always a balance between those 2 areas and taking into account a number of other factors. It's just not a one variable question or one variable answer that is price of oil up or price of oil down because we've often made more money in the bad times than in more robust times by taking on some projects when others were out the sideline.

And a great example of that, if I don't -- is going back in time to when we bought the Rodney Robinson lease and the Voni and those leases, they paid out at $20 a barrel during the COVID period, and that's one of the best deals we ever did and there's a time of worse oil pricing. And they've really kept giving during that time. And come forward, the same thing can be applied to times where the drilling rigs were stacking up. We've kept the same rigs for 10, 15 years or more. and have found that, that's sometimes where you have good rig hands, good pricing on your rigs, good pricing on your completion is the time to build that foundation.

So we talk about it in committee system, and it's pretty lively about what we want to do and who wants to do some slightly different. But we weigh when you start out with just $270,000 as I did to get to where we are today, you can be sure you've had lots of discussions and thoughts about how much to spend and where to spend. And we've kind of worked out a system among ourselves where we really try to stress test it and think about all the factors because there's other factors that weigh in on keeping a rig and keeping it going. what's going to happen next year, what is the quality of the prospects.

And I'm pleased to say our geologists have really knocked it out of the park on some of their ideas on drilling here and there, as you all have seen. And so we've had steady rise in our engineering reports and reserve studies that we do twice a year for the banks. There's been steady growth there. And so the capital spending is something that we weigh by itself, but in connection with everything else and the other capital requests from midstream and marketing, for example, is another area that they've come up with ideas and have pointed out, let's spend some money here on the midstream.

And of course, with the flow assurance, the added flow assurance that you get out of the basin has been a lifesaver for us at times when the rest of the basin was more or less shut down. So it's a multifactor deal and it's lively discussions. And I think I got to give a lot of credit to all the guys on the team that are helping make these decisions. I think they've been very wise and as Rob pointed out, look what it's done for our retained earnings. Over the last 3.5 years, we moved from a deficit to over $3 billion in retained earnings.

So it's a pleasure to come back in light of those good decisions and say we're raising the dividend again, which, in fact, is now the fourth time in 7 years. And getting up there to 3.5% or more, and we plan to keep going in that direction as long as Chris and his team and Tom and his team and the midstream guys are all making these, I think, very good capital decisions. So I think you can expect more of the same in the same manner, but we look at it more broadly than just looking at capital decisions based solely on oil price.

Yes. And Neil, this is Chris Calvert again. And I think Joe hit it on the head. And just to provide a little more color, I think when we look at specific project returns, you obviously, like Joe said, you have 2 factors, really multiple factors, but one that has really what we feel dislocated in the back half of this year, and that is the cost component to those returns. And so that cost dislocation can come from efficiencies, which we have proven to be extremely good at to where whether it's simul-frac, trimul-frac U-turns, the efficiency-driven cost dislocation has been the large player in 2025.

Now as we look into the back half of this year, we are able to take advantage of some more competitive service cost pricing. And so when you have the confluence of efficiency and service cost reduction, you can really tip the scale on project economics. Now I would also say that as we look forward, the tenet of what we have always operated on is optionality. And so when we look at this, it is October right now, when we provide a more clear picture of 2026 in February, we have the ability to flex up, flex down to revise the soft guide for 2026 if market conditions have changed. And so I think that is something that is extremely important to where if we see this cost dislocation somewhat converge back, we have the ability to make that change moving forward.

And our next question comes from the line of Derrick Whitfield from Texas Capital.

Perhaps leaning in on some of the efficiency gains you've highlighted this quarter, where are you seeing the greatest opportunity for continued gains? And more broadly, how much of your recent projected gains have been factored into your soft guide for 2026?

Yes, Derek, this is Chris Calvert again. From an efficiency standpoint, I still think there's always going to be ground to be gained. We have talked a lot about completion operations, simul-frac, Timul-frac. 2025, we utilize those 2 processes on about 80%, 85% of our wells. Trimul-frac, there's still ground to be made to where we can get that number. Right now, it's about 40% for 2025, look to boost that in '26. There's going to be logistical operations to where we can look to utilize money. Partnerships with San Mateo play a key part in this when it comes to treated produced water and using recycled water for fracturing operations is going to be a large part of efficiency gains from a logistics perspective moving forward.

On the drilling side, extending laterals, we're excited that as we move into the fourth quarter, we're going to have some of our longest laterals to date 3.4 mile laterals at the Ameritev asset. So something where we are extremely excited to bring some of that value forward. So from an efficiency standpoint, it's really across the board with completions, drilling, production, facilities measurements that we look to push forward. Now how does that play into 2026. Everybody on the call is very aware that $50 commodity price world that we live in is relatively recent. It's probably within the last 7 to 14 days.

And so when we've looked at how we guide from a capital perspective, if oil continues to be in this $50 region. I think there's potential to where we could improve upon a D&C cost per for range that we guided $835 to $855 for the back half of this year. So I think any sort of service cost reductions from a $50 oil commodity world I think there's potentially grounds to improve upon. But I think from an efficiency standpoint, we started the year at $880. We're going to finish $835, $845, give or take. A large part of that is efficiencies. And so I think as we look into we look to improve upon that number. And hopefully, like we've said in the release, we'll turn in line a similar net lateral footage but do it on a cheaper capital budget from a D&C side or a more efficient capital budget from the D&C side.

And our next question comes from the line of Leo Mariani from ROTH.

I do want to continue to harp on the same sort of point here. But clearly, you folks do have flexibility in your plans, what you certainly spoke to, that you certainly could adjust some things come kind of formal guide in February. I just wanted to come maybe get a better sense in terms of the variables that you guys are looking at, a number of folks out there are expecting kind of an oversupplied oil market in 2026. Just want to get a sense of how much kind of the old macro kind of plays into your thought? And I know you've certainly got some returns here.

But if oil goes another leg lower here, is there kind of a price level where you maybe decide not to grow so much? Would that be kind of in the $50 to $55 range. Just trying to get a better sense of how you're kind of thinking about oil macro and how that factors in your decision here I'm spending.

Yes. Leo, that is a great question. I think as we look -- and it will go back to Joe's answer, I think it was on Neal's first question. I think that's a story that we unfold and we tell when we live in that world. As we get closer to February, if commodity continues to slide, I think that's how we have to approach it. And like Joe said, it's done at the committee level here with all teams participating with more contribution. And it's really -- it's an internal discussion.

However, I think as we look at that, that the optionality that we maintain, whether it's at the rig level, even more flexibly at the completion level that we are able to reduce activity in that world if costs don't continue to go down in that reduced commodity price. And so I think that's how we would kind of look at it. But it is not a single variable. And so I don't know if Joe or would like to chime in.

Look, Chris, yes, those are all good points. But remember that it's we don't look just at the oil price. One factor that has influenced us and made us more active is the fact we've reduced days on well that if you drill these wells faster, you save about $100,000 a day. And that makes a big difference in looking at your right of return. So as each day you save, you improve what makes sense to drill at what particular rate of return.

The second thing that I'd say is that the drilling companies. We use Patterson more often than anybody else. And Patterson is making improvements all the time on their equipment and their people. that you have that also creating the efficiency. So price -- some drops in price can be replaced by efficiency gains, but also these wells are going to produce for 30 years. So to look at it just on the price of oil, what the price of oil is today is narrow-minded because again, I point you back to the Rodney Robinson wells and the other wells we drilled in the coded period, you had low oil prices then, but they were paying out within a year.

On the strength of its production, the low well cost. So they're just -- these other factors have to be not waived once and then you wait 6 months to drill a well, there may close in time when you spud and you can always postpone and you can just say we're not going to do it now. And if you have a long relationship with the service companies, they'll work with you. They don't want to lose the business. So everybody works together on these things to do it at a more or less optimal times.

So the capital decision really is the one that drives it so much for a company like us that have the capital resources we do, $2 billion on our line of credit. Paid down debt to a small amount, it really is a larger question on that is what efficiency gains taken into account what efficiency gains, what these other costs are in cost of price. And I really commend Chris and his team for reducing that where you're your per foot cost is less now than it considerably less in my mind, where you can save $60 million has to be taken into account on the decision.

Do you go ahead with this capital spending now thinking that anticipating that with the efficiencies and the like here, you're going to still come out ahead. And they're going to use their best equipment and best hands and they all know that reducing cost is their major objective and ours is working for the long term, and we're not spending just to be spending, but we're spending -- fully intending to make money. And you can see that by the number of shares and participation by our employees and buying stock in the open period.

So I feel real comfortable that everybody is taking things into account and pointing out the positive of drilling these wells or doing other capital events at the same time in coordinating it. So it's a balance between what the choices you have to drill or to acquire properties or use them to keep building out your midstream, which has worked out to be a real good deals. So we have a lot of opportunities, a lot of choices and there's a lot of thought and effort put into it.

Yes, Joe, this is Brian Willey, the Exec Vice President of Midstream. I think you're exactly right. You mentioned the midstream business. And just a couple of items on that. That business is performing extremely well. We had a new processing record last quarter, 533 million cubic feet per day of natural gas was processed. So we continue to how that success as we get into the fourth quarter. It's been a great start to the fourth quarter. not only is the business performing well, but we've talked a lot about the different options with that part with that business because we don't believe that the value of the midstream is fully reflected in Matador share price.

And so we continue to explore the options. And we can be patient there. We don't necessarily have to have that money at Matador, so we can be patient and make sure it's the right opportunity and the right transaction formatted our shareholders and provide the most value. And maybe the last point I'd make is just Matador also has some wholly owned assets that they retain and they continue to operate. And those are assets that we acquired in the Advanced acquisition and the Ameredev acquisition. It's about 250 miles of pipeline altogether, great assets. And those assets are about $30 million to $40 million this year in EBITDA is what we expect. And we also next year expected to be between $40 million and $50 million in EBITDA for those assets.

So those are great assets that we could we could drop down eventually down to San Mateo with the right situation. And it's a great business at San Mateo and the midstream business because it's a fee-based business. It's something that despite the ups and downs of the commodity prices, we continue to get the fees from our customers, including Matador, but also including third parties. It's been a great year for third party. We've had a new customer on the oil side, and we continue to expand the relationships with our existing customers and repeat customers as we move forward.

And so the midstream business continues to perform very well, and that relationship and partnership with Matador, the team there and team here at San Mateo, this really is a benefit that I think is hard to replicate and very unique for Matador and its shareholders.

This is Greg, Craig, EVP of Marketing and Midstream Strategy. I just wanted to pile on a little bit as far as the midstream business is concerned. As Brian mentioned, as far as it is a fee-based business and not commodity. So these lower commodity prices do not have an effect on the fees that we get on San Mateo. Also, I wanted to point out that as far as flow assurance as we parked on that every time we have an opportunity to do so just because it is so important to Matador and to our third-party customers.

And we feel like we're a step above some of the other third-party midstream companies just for the simple reason, I mean, we're tied to those with some of our midstream our wells at Matador, those other companies. And there they're just not as reliable as we are. We feel more comfortable with going to the San Mateo and Matador owned systems. So I think that's a huge factor for us as well.

Yes. And this is Brian Willy. One other thing to add, Slide 12 actually shows an outline of our assets. You can see the 50 miles of pipeline, the 720 million cubic feet per day of processing. And I think just generally, if you just look at the slides generally, if somebody took a minute to look at the slides, you'll be able to see did a great job Matador and is doing all together and done a fantastic job that we're doing.

And so I think if you haven't taken time to look at the slides, I think it's a great opportunity to be able to look at those and get a great summary of the progress that we are making at Matador. And so Slide 12 has Matador wholly-owned assets. You can see those in blue on the map. But even all the different slides, there's really summarize the great progress that we're making.

Right. I hope that answers your question. But another thing to look at is that look on Slide #4, and you can see the progress we've made over these 12 years since we went public in this Matador. And where we sit and why having that midstream to service our area. And the other midstream companies have been very cooperative. We've all tried to cooperate with each other on offloads.

So there's good have in the midstream gives you -- puts you in that club where everybody helps each other if some is down for maintenance and I want to thank everybody for the way they do that and get the gas out of the market. Greg, do you want to add to that?

Yes. I do want to say how to shout out to our -- some of our third-party offloads that we have, one of which is -- I want to congratulate MPLX for their acquisition of North Wind will have a long relationship with MPLX, and we're looking forward to working with them further on our North the North wind asset and the fact that going to be a solution for us for our sour gas in CO2. And I might add, as far as enterprise is concerned as well with their acquisition opinion. We'll have -- we've got quite a bit of gas dedicated to them as well, and we look forward to that. We're also doing quite a bit of business with Targa. And so we're looking forward to doing additional business with them, and we've got a great relationship with all those folks.

I hope that answers your question. But if you need more, we again invite -- everybody on the call to come see us. We'll devote more time to you and to see our operation because there's aspects of our operations, such as our MAXCOM room, which is monitoring all of our drilling activity that is added to the efficiency games that's led us to lower prices, which is open up the door to more capital decisions. and adds to the long-term nature of what we're trying to establish in New Mexico.

And our next question comes from the line of Noah Hungness from BofA.

For my question here, I was hoping to kind of ask on water handling. We've seen a lot of activity in the water handling sector this year. Obviously, San Mateo has a large watering handling business. And as you guys continue to leverage trimul-frac and simul-frac operations, it seems to be playing an increasingly important role there. But I guess, could you maybe talk about just general growth aspects for that company or growth outlook and how you're thinking about that business today?

Yes. Noah, I'll start from the Matador side of things. And then Brian can also talk about it from the San Mateo side. But next year, there is going to be -- we're looking at roughly $40 million to $50 million investment in Matador's wholly owned midstream business. And a lot of that has to do with the build-out of our water gathering system, both in the Ameredev area and in our at Mesa kind of Ranger area. And so because that investment is really talked to -- speaks to the integrated nature of of the upstream business with the midstream business and to be able to provide an increased percentage of produced water for these intense hydraulic fracturing operations.

Chris talked about some of the efficiency gains that we've seen in that realm. And I think it is a great example of us working together to increase the amount of produced water. It lowers use for hydraulic fracturing operations, which reduces our lease operating expenses, and it reduces the capital spend for the -- on the frac side. And so yes, there is an investment there to increase our water handling capabilities.

And our next question comes from the line of John Abbott from Wolfe Research.

Our question is going on natural gas pricing. I mean we did see some negative Waha negative during the first part of October. And then as you sort of look out in the Permian, there's going to be additional takeaway capacity, do you think that gets filled. So I just really sort of like how do you think about gas price in 4Q? And then how do you think of gas pricing longer term? Do these pipes get filled? How do you think as you sort of report on a 2-stream basis, how are you thinking about the gas price in your realizations?

John, I'll start if Greg and Anton want to pile in here, that's great. But yes, so in Q4, as we highlighted in the release, we did elect to curtail some wells for a few weeks during this long-haul maintenance -- long-haul pipeline maintenance period. And in doing so, we avoided paying those kind of deep negative Waha pricing. I do think it speaks to Matador and our ability to be nimble and make sure that we have that lever as an option to pull in this sort of environment. And we saved a lot of money in doing so and really just deferred that production to where Waha prices are positive as they are today.

And then on your question about these long-haul pipes that have been already decided to be funded for building, you've got [indiscernible] that's coming on later this year and Blackcomb and GCF expansion, all of which will add roughly 4 Bcf towards the latter part of this year. And so we do think that the longer-term view. And really, I mean, just 2026, that the capacity issues, if you call them, in the basin for Waha will be relieved by those pipelines.

Yes. The other thing, Glenn, as you mentioned, weather still plays a role in the gas pipeline business. And so you hit October, each year or end of September, you're faced with this risk. So you want to be sure you have the balance sheet that you can work through those periods. And the second thing is that solutions are coming that the industry midstream industry is very responsive to this and finding ways out. And I'm pleased to report today and on, you have a better handle, but price at gas of a selling price is $1.50 now.

This is Anton [indiscernible], Executive Vice President of Marketing. Joe is correct, cash has gone a little bit stronger out there at Waha, and we anticipated some of this and so we went out and put in hedges for 2026 where we have a big hedge position to protect downside risk on Waha. As we know, all these pipelines are coming online in '26, we'll have GCX expansion mid-26 or 0.5 Bcf. Backhoe will come on for 2.5 Bcf and Hugh Brinson will come on at 1.5 Bcf, and that's all going to happen in '2026 which should alleviate some of this pressure -- downward pressure on Waha prices going forward when you start looking at the end of '26 and '27 should be a great time for Waha production on our gas and get us a lot more opportunities produce more of our gas wells that we have an inventory that we haven't drilled yet because of these lower gas prices, but in '27, '28, we'll have a lot of opportunity to drill a lot of gas event out there.

And our next question comes from the line of Zach Prime from JPMorgan.

I wanted to ask on well productivity. Just looking at the publicly available state data, your well productivity on a per lateral foot basis is down a little bit year-over-year in 2025, but relatively in line with where you were in '22 and '23 is 24 was a really strong year. I know there will always be some variability in productivity data just given the geographical mix of wells on various lateral lengths. But could you talk a little bit about your expectations for well productivity going forward and how you see that trending into 2026.

Zach, this is Tom Elsener, EVP for Reservoir Engineering. Going into 2026, we have a very strong program. We expect the same or better be per foot in 2026 as we have seen in coupled with the -- all the commentary about these longer laterals, we expect to see lateral length increase approximately 10% going into 2026. So that should be really positive for the total EURs really positive for the capital efficiencies, lowering well costs. These are very strong projects, as we've talked about with rate of returns over 50%. And these are 1.1 million, 1.2 million BOE wells. They are very strong wells that are very durable and a wide variety of lower oil and gas prices.

I think that the team should be committed for all the hard work and cooperation they put together. I think it's quite the opportunity to bring these wells forward. As Chris mentioned, things have gone better than expected operationally. The team is coordinating with midstream to have all the permits, the pipelines, all the drilling and execution, all the completions, all the wells turned online on time and under budget. I think, has really been something that real been something that we're proud of and we expect to see that going forward. I think it will continue on beyond 2026.

I think that a lot of these really high-quality Wolfcamp and Bone Spring wells have been pushed further north. And as 1 example of that has been our Avalon well that we've highlighted in the release at Gavilon. That's a well that has produced over 280,000 barrels of oil in the first 12 months of life, and it's already paid out and will continue to pay out many more times into the future. So I think our inventory is very strong, and we're very, very excited for the wells we're putting up on the board for this year.

And our final question for today comes from the line of Kevin MacCurdy from Pickering Energy Partners.

Just continuing to touch on the midstream angle. What is the impact of the increased activity on the San Mateo volumes and EBITDA outlook?

Yes, this is Brian Willey, Executive Vice President of Midstream. That partnership we have with Matador is critical to us. It's about 70% to 80% of our revenues come from Anido. And so as Matador grows, oftentimes that leads to growth of San Mateo as well, just depending on where the growth is. So I think we'll have more to talk specifically about that, of course, next year when we lay out our plan, but that's a great partnership that we have with Matador and something as you look at the capital expenditures for next year, Glenn mentioned earlier the Matador owned capital expenditures.

I think we had mentioned in the release, the 8% to 12% tablet expenditure increased. And approximately $90 million to $100 million of that is midstream, whether that's San Mateo and our share or whether that's made or owned. And so we have some really great projects on tap for next year to continue to grow the company and continue to expand the business as we support Matador.

Thank you. Ladies and gentlemen, this ends the Q&A portion of this morning's call. I'd like to hand the call back to management for any closing remarks.

Thank you very much, and thank you, everybody, for spending the time in here with us. And again, I repeat, if you want more information or have more questions, you'll find us successful. Rob will be happy to take your questions and get answers for you. And we try to pride. I came -- didn't come up through private equity but came up through friends and relatives. And with friends and relatives, they have a higher standard for communication and being accessible, and we want to maintain that. A lot of people, as I said, I think one of the issues just confront it directly is capital spending. Are we outspending our cash flow. And I think the answer is clearly not.

If you don't believe the accounting that we've gone from a deficit to throw over $3 billion, having made good decisions, then look at it this way. I've never sold a share of stock in Matador, and we have a whole group of executives that have it either and as far as the employees go, we have an employee share purchase plan with over 95% participation. So the people that know the company best, we're buyers basically, not sellers. And we can see the future coming up. And we don't upon it. We look more upon the quality of the rock and the quality of the operations as opposed to what the oil price per barrel is because you can have a very high oil price and the capital decisions. They don't have good operations or something else can affect it that they're spending too much on their bank debt and are in a bad position.

But over 40 years, remember, we started with just at 270,000. So over 40 years, we've grown to this point. And it's from having a good decision-making process, not that we've never made a bad decision, but not many of them and made a whole lot more in times of oil price being shaking for 1 reason or another and have pointed out some of those instances. But if you keep going and be that much more selective in your decisions, you can build an organization and there are more good people become available, and it's worked to our advantage, not that I welcome $50 oil for a sustained period, but it's not fatal, either if you've maintained your balance sheet all through time and your bank relationships, you just have to be a little more careful.

The midstream has helped because it's a fee-based and gives us further balance. So as we say around here, we like our chances. And I think if you come to visit and meet the staff, you'll say these are people I could trust with my I won't say it's your life savings, but you could trust your investment because we've come a long way, you've got a 40-year history to look at. And we're pretty optimistic, and we see the opportunities growing for us rather than being reduced. And I think this period going into the fourth quarter. Frankly, we've never looked so good with more options than we had before and more targets of opportunity for 2026.

So we're excited. But I do think that as helpful as these questions are on these kind of calls, it's even better to come see us have breakfast or lunch with us or even dinner and meet the people behind these capital decisions and say that, hey, they're reasonable people, they're professional and they wouldn't be spending the money on this well or that well if they didn't have a high degree of trust and confidence in it. And I think that's what you get for investing in Matador. We do have a sheet that says why Matador. It's at the back of your -- of the earnings release and really encourage everybody to look through those exhibits. And I think they tell the story in 5 to 10 minutes of why Matador.

And an original investor in first Matador was in it $0.85 sold for $18. 95 and an original shareholder in this Matador is in for $3.56. So it's come a long way and we like our chances. And better today than ever. And I think we thank the Board for working with us, we think they're distinguished. And it's a good process. We rank up there. [indiscernible] can tell you more where we rank in New Mexico, but it's a top 5, top 10 type of company. So started out with -- you have on Page 4, how little we started with back in the early '90s to where we are today. So please give it serious consideration. And if you want more information, we'll here and if you want a personal in-person discussion if that would give you greater comfort just give back a call and he'll schedule it, and we'll enjoy meeting you. We would like to wish we could meet every one of our shareholders so they would have that personal relationship.

So thank you very much for your attention today and come see us. We like our chances and we feel very comfortable that next year is going to be a good year for us, one way or the other. Thank you.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Good morning, ladies and gentlemen. Welcome to the Second Quarter 2025 Matador Resources Company Earnings Conference Call. My name is Gigi, and I'll be serving as the operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes, and the replay will be available on the company's website for 1 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 Matador. Mr. Schmitz, you may proceed.

Thank you, Gigi. Good morning, everyone, and thank you for joining us for Matador's second quarter 2025 earnings conference call.

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 the comparable financial measures calculated in accordance with GAAP are contained at the end of the company's earnings press release issued yesterday.

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 earnings release and its most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.

In addition to our earnings press release issued yesterday, I would like to remind everyone that you can find a slide presentation in connection with the second quarter 2025 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, Mac, and thank you all for listening in. We appreciate it, and we look forward to your questions and comments and being able to report to you that we feel that we've had a very solid quarter, very well executed. And it's pleasing to us because we have some people in new leadership positions. And everybody else has really pitched in. And I think it's exciting to see some of the ideas and the programs that they've recommended, and it will be to everybody's benefit.

In particular, I'd like to introduce Bill Lambert to you. Bill is our CFO and Head of Strategy. And I think you'll find that he has a lot to offer, and you'll see smooth running from this point forward.

His aim and our aim when we were -- as we were getting to know each other was very similar. We come from very similar backgrounds and culture. We've laughed about that some, and that I think you all will enjoy getting to know him. I think many of you already know him. But our plan, our aim is to increase our production, but to also increase our free cash flow, not to do one at the expense of the other, but to work them in tandem as that if your production is going up, your cash flow needs to be going up, and vice versa. If your cash flow is going up, spend it wisely on some production and drilling opportunities, but be careful to keep that strong balance sheet in times like this where you have the turbulence and the volatility.

The strong balance sheet is, I think you'll see, is a background for a lot of our initiatives and has helped us to achieve the progress that we have.

More specifically, we believe we're well positioned for the back half of the year with drilling opportunities, cash flow opportunities. We have $1.8 billion available on our line of credit. Our banks have been very supportive of us. We have all 19 banks reaffirmed their plans to stay in the group. And I think 15 -- or 16 of the banks are also in our midstream facility. So thank you all very much for that support and vote of confidence.

Obviously, as you have seen in the report, that we've increased our full year guidance for 2026 both in oil production growth and cash flow. Obviously, this is a result of successes in the drilling program, which pleases us. And we are now producing in the Delaware from 20 different zones. My whole career, 40 years, has been spent primarily in the Delaware. We consider that as a land of opportunity. But I'm also glad to report part of our time in Louisiana has resulted in us having, in our deal with Chesapeake, to reserve the Cotton Valley formations above the Haynesville, and we believe we have 200 billion cubic feet of gas there or more waiting, all HBP, and just waiting for more stability in gas prices.

Another opportunity that we're pleased to mention to you is our midstream opportunities. That has been a game saver with the tightness in the midstream markets out there in New Mexico. We got into it for flow assurance, and Gregg Krug has guided us in this regard. And we've grown our midstream capacity from 0 at the time of our original IPO to where we now have 720 million a day in capacity and recently turned that on. So it's about half full now, but we'll soon, we believe, we'll, before the end of the year, likely to be at full capacity or close to it.

The team is, in that regard, we were faced with the choice of either building that plant, which was $200 million or more or putting that into drilling. And we concluded that it was best to build the plant, that that would balance our asset base so that we were in a fee-based business, along with the commodity-based business, which would be longer-lived assets and would be a [ balance ] to our production plus and, perhaps most importantly, provide flow assurance to us in our operations. And been very glad that Gregg suggested this and helped guide us along the way.

In addition, in this regard, we've also -- are now recycling over half of our water production back in, which is a moneymaker for us. We're saving having to buy additional water.

In the meantime, we've grown our base dividend. We've raised it 6 times in 4 years. And as our habit is, is to review the base dividend at the end of each year. And we take a lot of pride in the base dividend and trying to make it be the right amount. We believe it's most fair to all the shareholders. We are very pleased with our results and our buyback of shares, but the base dividend is something that all enjoy and believes helps make people stickier.

We continue our brick-by-brick program, and we paid down debt. So our debt level is now with a ratio of less than 1.

And finally, we've been reducing our lease operating expenses, principally through efficiencies and out there in our chemical program, which has been implemented, I think, in a very solid fashion and it's generating savings.

And the last thing is the way we look at things, I know there are going to be questions on what is the quarter result and how that compared to the sequential quarter. And we tend to look more at how is it over the course of the year. So how does 1 year compared to the last year? And it's just that the cycle in oil and gas, we think, is more than a quarter-to-quarter business. We do like to look at the quarter numbers, but the year-over-year numbers are more important. For example, on production, is up a little now. But when you look at it year-over-year, which you don't have as much timing differences, is up 31%.

So with that, let me open the floor for questions and give Bill a chance to talk about our strategy and financial plans.

Thank you, Joe. It's a pleasure to join the team here. I think really just before we jump into the Q&A, the opportunity to join Matador and the business that we have here, I think our integrated business is extremely well positioned to deliver on both a robust free cash flow margin as well as oil production growth. And being able to do both of those things is something that we think is unique in this world. So look forward to answering your questions, but very excited to join the team.

Gigi, we'll turn it back to you for Q&A.

[Operator Instructions] First question is from Tim Rezvan from KeyBanc Capital Markets.

I wanted to start on midstream. I was a little surprised to see there was no change to midstream EBITDA guidance for the year. You had a record second quarter. You lowered midstream OpEx guidance...

Tim, I think we lost you.

Tim, this is Brian Willey. I'm happy to take that question about the record quarterly EBITDA. We appreciate you recognizing what a great quarter we had at San Mateo. And really, that starts with the men and women in the field, led by [ Thomas Tree ] and [ Brian Nicholson ] and some of the others as they brought the new Marlan plant online and increased processing capacity from 520 million cubic feet per day to 720 million cubic feet per day.

And really San Mateo's record performance during the second quarter was driven by Matador's record production growth during the quarter. And so San Mateo during the end of the first quarter and during the second quarter connected to approximately 30 new Matador wells. And those were areas where San Mateo provides oil, gas and water. And so as Matador's production increased and had record production, that was the same thing with San Mateo, we had record EBITDA.

In addition, the team has been hard at work with third-party contracts and finding ways to save costs. For example, we often talk about the coordination between the upstream and the midstream. The operations folks on the San Mateo side, led by [ Shawn O'Grady ] and [ Justin Haas ] worked closely with Glenn Stetson and his team and their chemical consultants. And we're actually able to save about $1 million on chemical costs during the quarter.

So really, just a fantastic job on the coordination between the teams. And as we look at the EBITDA for the remainder of the year, the first half of the year EBITDA was about $145.5 million in total, which is about half of the expected EBITDA range for the year of $275 million to $295 million. And so we still expect that range as Matador just is drilling to [indiscernible] and away from some of the areas where San Mateo operates. But we're excited to continue to provide flow assurance and great value for Matador shareholders.

Our next question comes from the line of Scott Hanold from RBC Capital Markets.

I'm going to stick on the midstream topic, and I know you all get asked, it seems, like almost every quarter. Just wondering what your view right now is on the progress of looking at options for that, including potential IPO. Just if you could set a view of how do you think about that time line and what do you need to see from the midstream entity to be ready for that potential value-creating opportunity? Is it a size and scale thing? Is it just one of those things you're just still assessing whether it makes best sense for Matador at this point and its shareholders?

Scott, thank you for that. I think as we think about it, we do believe the value of our midstream business is not reflected in Matador's share price today, and we continue to think about ways to highlight that appropriately for shareholders. I think as we think about that, there are a number of opportunities and things we think about with respect to that. And I'll let Brian Willey jump in here as well.

Yes. Thanks, Bill. This is really an exciting time at Matador. Joe mentioned Bill joining the team earlier this year, and he's been just a fantastic addition to Matador. And it's allowed me to go and focus more on the midstream business and really push forward evaluating some of those strategic transactions. And so whether that's something on the debt side or something on the equity side, there's a lot of opportunities in front of us.

We can be patient at Matador to make sure we do the right transaction for Matador shareholders. We're free cash flow positive so we don't necessarily need to do any type of transaction at San Mateo. But we do recognize that the value of the midstream business is not reflected in Matador stock price.

And so we look forward to continuing to provide excellent service to Matador, as I mentioned earlier, as we explore the right strategic alternatives to provide the most value for Matador shareholders over the long term.

I would like to add, we're not just doing it for Matador and Matador shareholders, but the midstream team has done an excellent job of developing some great relationships with third parties that are repeat business. That's one thing that we've considered, is how much of our third parties repeat, and they're almost all repeat. And they're the so many of the really great companies of the basin, been there a long time, very strong companies financially and on production. So we're delighted by that progress and think it gives us a lot of options of how to optimize that value.

Gregg, would you add anything to that?

No, Joe, I think that's spot on. We're definitely looking at any way we can optimize our value for San Mateo and as far as that goes all to midstream. And so we're trying to keep every -- look under every stone possible. So we're trying to position ourselves in a -- as far as to have the management staff there to be able to realize that.

Our next question comes from the line of [ Zach Parham ] from JPM.

Just wanted to ask on activity levels. Can you give us some detail on how you're thinking about rig activity in the back half of the year and going into 2026? If you continue running that 8-rig program that you're going to be at shortly, what type of production growth does that deliver in 2026? Or is that more of a maintenance program? Do you need that ninth rig to deliver some production growth next year? And maybe talk about how you're thinking about the decision to add that rig back potentially.

Thank you, Zach. I think that's obviously very, very topical right now. And as we look at it, you're right that we will be at 8 rigs here kind of basically the end of the week. And as we think about when we might potentially add back, I think we should really step back and think about what was the decision to ultimately change back in April. And what we looked at in April was a macro environment that was highly volatile, and we had the ability and flexibility in our program to optimize 2025 capital efficiency by moving some things around and reducing rig activity. With that, we were maintaining the free cash flow margin that we think is so important and balancing that against oil production growth.

As we look into 2026, and I don't want to guide in detail at this point, but I think as we think about the second half of this year and 2026, what we really think about is how do those 2 metrics work in tandem? And if there are opportunities to add activity and drive incremental growth, we want to make sure that we can maintain those superior margins and have incremental free cash flow from doing it.

What we think one of the strengths of our portfolio is we believe that we can defer making that decision until later this year or the beginning of next year, and still be able to drive relative growth in 2026 versus what we believe the industry average growth rate will be. And I think that is important because we do believe that Matador has traditionally been known as a growing oil company, and we believe maintaining that alongside the free cash flow generation is kind of the focus of how we think about things going forward.

Our next question comes from the line of John Freeman from Raymond James.

Just sort of following up on Zach's question. If hypothetically we're in sort of a lower for longer sort of oil price environment, I was going to touch on something you said earlier in the prepared remarks, Joe, about you all had a decision a couple of years ago whether to take the $200 million and put in towards just drilling more or putting it towards building that plant. And I'm just curious if you all sort of just, in a hypothetical kind of lower for longer environment, if, theoretically, your growth profile just naturally kind of is a little lower in that environment as maybe more of that "growth capital" potentially gets shifted into the midstream business.

So I think, John, to your point, we had the decision on investing in the midstream. And I think really what it goes to is we believe our integrated business can drive best-in-class free cash flow margin. And so I think predicting commodity price has been a challenge for everyone, frankly. And so whether it is lower for longer or volatile, I think what we try to look at is how do we deliver best-in-class free cash flow margin.

And so one of the ways that we did that was traditionally investing in that midstream to drive the flow assurance to recognize that we could sell our oil and capture that free cash flow margin. If we had not had the flow assurance that San Mateo provides us and the excellent service that they have, the reality is we wouldn't have had the oil production to have driven the free cash flow that we have today.

And so we look to think about these things in tandem on a go-forward basis. And to the extent commodity price follows the forward curve and the steep backwardation that is within it, we'll obviously adjust and manage activity levels on both the upstream and the midstream with that. I think one of the things that we look at though is we believe our relative free cash flow margin to the industry, alongside the depth of our inventory, means that not only can we deliver the exemplary free cash flow margin today, we believe we have duration because of our portfolio to do that. And the midstream and the integrated nature of it helps sustain that over a longer period of time.

This is Gregg Krug. I also wanted to emphasize the fact that we do have -- I mean, San Mateo has a 99% run rate. And that's huge in the midstream business. And the assurance that we get as a producer is that we're going to have an outlook for our gas and oil and water takeaway on a regular basis, and something that runs really efficient. So that's another reason we elected to do what we did.

Our next question comes from the line of Noah Hungness from Bank of America.

I wanted to touch on D&C costs. This quarter, you guys had D&C per foot cost well below the low end of your guidance range. I was just wondering, what drove that? And then how sticky are those drivers?

So thank you, Noah, and I'll start and then Chris will probably jump in. I think one of the benefits of our portfolio is from east to west across the basin, we have varying depths and varying cost profiles within our portfolios, is how we think about it. And one of the things that took place in this quarter is we had exemplary performance in a lower cost area of the basin more to the westward side.

I think the reality, and Chris will jump in here is, as we look to the second half of the year, we have not incorporated significant service cost reductions. We have only thought about these things in terms of the cycle time efficiency at this point. I'll let Chris jump in and talk a little more.

This is Chris Calvert, EVP and COO. I think it's a great question. Obviously, we appreciate you recognizing the D&C cost per foot number. I guess few things I would like to say to that. Obviously, the improvement year-over-year, if you look at second quarter in 2024, we're down about 11% from that. I mean we can refer to Slide B in the presentation if you would like to look at it graphically. But I think the majority of that improvement comes from the efficiencies like Bill just spoke to. While we do potentially think there is potential for service costs -- more competitive service costs coming in the back half of this year kind of post April 2, these improvements have been drastically due to efficiencies both on the drilling and completion side.

And we can start on the drilling side, really kind of focusing on our U-Turn program. If we look at 2025 U-Turns versus even when we started in 2023, I'll refresh everybody's memory, we drilled 2 wells in the U-Turn style in 2023. On average, it took us about 25 days to drill those wells. And in 2025, on average, we've shaved 10 days off of drilling 2-mile U-Turns in a 2-year period.

And so I think those drilling efficiencies are not just specific to the U-turn program. We're drilling wells faster on the completion side. In February, we guided around 40 wells would be completed using trimul-frac, in the trimul-frac process. Year-to-date in 2025, we've already done 30 wells with trimul-frac, and now we expect that full year '25 number to be closer to $50 million.

And so to refresh everyone on that, it's about a $350,000 cost savings every time you can trimul-frac versus zipper operations. And with that, you're also seeing efficiencies of about 20% or 30% faster even versus just simul-frac process. And so I think you have drilling efficiencies, completion efficiencies are speeding up that all kind of lead to this collective 10% to 15% improvement. From January 1 of this year, we're drilling and completing wells about 10% to 15% faster than we were 6 months ago.

And so I think that leads to this improved D&C cost per foot number. And like Bill said, if we see that oilfield services come in, and there is some sort of deflationary pressure or more competitive pricing that has not been included in our forward-looking back half of 2025 estimates.

And some I'd like to commend Chris has done very well with is we've -- in the 40 years that I've run Matador, going back to very inception, we've always taken the approach, when these times are, that we don't fit one vendor against the other vendor and just try to see which one will get down to the very lowest price. We've tried to build relationships. And we have found for whatever reason, that has worked better for the creating long-term reduction and finding of efficiencies. Because you're not trying to beat them down, but you're working together, and they have ideas how to do things faster and better, and we have them. And by working together, for example, our driller, either they or their predecessors who drilled virtually every well that I've drilled in this 40-year career. And they're finding ways to improve, and we are, and it's been a great collaboration.

And the same thing on the pipe business, we're using the same guy for years and years. And then virtually all of our completion, our fracking, has been done either by Schlumberger or Halliburton. And in there, after each job, we do a postmortem on whatever area and say, how can we improve? How can we give you better notice? How can we create the efficiencies?

And Chris and his team, and Cliff Humphreys, have done just a great job of building those relationships and the communication between them that has led to a lot of these efficiencies. And the crews. They -- that Chris and our drilling engineers have done a good job of training the crews to look for those little ways to make things more efficient and bring down the costs.

Chris, I'm sorry for jumping in on you like that. But I just couldn't resist to brag on you all a little bit on how you've done it without beating people down, but getting them to suggest ways to and for you all to find ways.

Yes. Thank you, Joe. I appreciate you pointing that out. And one thing I would also just want to point to is, I think, back to even Zach's question about activity levels as we look into the back half of the year. We understand the headwinds of volatile commodity times, but we also see opportunities. And one of those opportunities is high-grading operational equipment, whether that's rigs, frac fleets. And so like Joe had mentioned, our primary pressure pumping providers, which is Halliburton next year, we've managed to high-grade a lot of equipment personnel to where we are able to implement and integrate those simul and trimul-frac opportunities. And so like Joe said, it is all about relationships and something that Joe has cultivated over 40 years that we continue to push forward today.

Our next question comes from the line of Phillip Jungwirth from BMO.

Recognizing that an IPO is just one of the options you could look at to unlock midstream value. But as you think about San Mateo from a public investor standpoint, how important do you think it is that you have a competitive organic growth profile for Matador? Or is visibility around third-party volumes enough?

And if it is important, do you think of that as more of an absolute type low, mid, high single-digit type number, or is it more relative to overall Permian Basin levels?

Thanks, Phil. I think the -- to start that off, I think Matador thinks itself as a relative grower in the basin. And I think obviously, that growth rate is balanced with the free cash flow margin, as we've discussed previously. But I think our portfolio and the depth of our inventory life allows us to grow and sustain that growth with the type of returns we want to have over a long period of time.

And I think within that, it does -- the partnership that we have with San Mateo, the integrated nature of that business, is key to Matador delivering on that and is key for San Mateo from a growth profile. So I'll let Brian talk more about kind of how we think about Matador growth versus third-party growth. But I think first and foremost, the nature of how this business has come into play has really been around driving a superior result for Matador's free cash flow.

Thank you, Bill. I think when we look at growth at San Mateo, we see opportunities both at Matador and with third parties, as Joe mentioned earlier. We have a lot of repeat customers on the third-party side in addition to new customers that we continue to look at and pursue.

So especially up in that Northern [ Lea County ] area where the Marlan plant just came on, we think there's some really good opportunities there. As Joe mentioned earlier, the Marlan plant is about half-full right now. I think it's about fully committed on the reserve capacity side, and it will take a couple of years to fully go up, but it is fully committed.

And so those opportunities for growth present themselves on both Matador side and being able to continue to follow Matador and the drill bit, and then with third parties. We have just a great team and a BD team that's doing a fantastic job. So we see growth on both sides.

And I'd like to emphasize is that we got into this with a whole idea that, yes, we might be -- Matador might be the major customer, but to succeed and meet the test of quality, we needed to be sure to attract third-party business. And we have really tried very hard to be sure that the run time is 99%, they enjoy that benefit and all the other benefits the same as Matador. And I think that's why it's led to repeat business as they did feel they were fairly treated and communicated and like the operations. And so, so far, that's been without problems. And we appreciate their involvement and we appreciate the guys in the field who have really done the extra job to reach that 99%.

So when you had High Storm Yuri go through, they didn't shut it all in and say, we'll get back next week when it warms up. They slept in their trucks and kept the plants going. And in addition, we've improved the system by adding that connector line between the Black River system and the Marlan system. So we've had gas going in each direction on that connector line as the offloads are needed.

So proud of that record and proud of the support that we've had. And I think that's given us additional opportunities of what we should do for the midstream business and which drives the value of the midstream business. So there are some good options that we have ahead of us. And so we're very glad we elected to build the plant, to take that $200 million, build the plant, which left us with enough money to pay down debt and not just putting in additional drilling. I mean that just adds to the inventory and why we feel we're well positioned to either keep building the midstream and the regular oil and gas operations, and to them in tandem, to do that together and didn't do one to the exclusion of the other. We make -- we think that gives us more balance and more stability and gives a big upside to the stock.

Our next question comes from the line of Kevin MacCurdy from Pickering Energy Partners.

I appreciate the details on the cash tax reductions this year and the change to guidance. Any thoughts on when Matador might now become subject to the AMT and how cash taxes will trend on a yearly basis until then? This seems like maybe an underappreciated improvement to your free cash flow outlook.

Thanks, Kevin. Yes. This is Rob Macalik. I'm the EVP Administration and Finance. And as we did note in our release, we're very pleased with the Tax Act and are very optimistic on the cash tax savings that, that will bring us. We do believe that this pushes out our obligations under the alternative minimum tax for several years based upon our current rates, but we're still analyzing that part. So I do think that that is going to be a benefit for us starting in Q3 of 2025 and beyond.

And also to show our seriousness of -- in these areas, is that Rob is moving over to do more strategy and chief financial work for the midstream. And [indiscernible] has taken over the Chief Accounting Officer, and he's come in and done an excellent job. And he and Rob have really worked together, which is important. So Ben, thank you for joining us and doing good work. .

Our next question comes from the line of [ Oliver Huang ] from Tudor, Pickering, Holt & Company.

Just wanted to circle back on activity. I understand the timing of the drop down to 8 rigs as part of the full year plan here shortly. But the years upstream spend trajectory would seem to imply another letdown in Q4. So I was hoping that you all might be able to walk through the cadence of frac activity anticipated for the rest of the year and any flow-through effects we should be aware of when thinking about the start of 2026.

Yes. I think, Oliver, to your point, we do see with the current level of activity that to be generally the case. And I think it's a function of, frankly, a lot of good work by the team to pull activity because of the efficiencies that we've mentioned before into the third quarter. And so you're seeing a little bit of higher third quarter capital with wells that are being turned on in, frankly, the last couple of weeks of the third quarter. So they're really not contributing to third quarter production as much as they are in the fourth. It's very similar to what we saw in the first and second quarter of this year.

And with that, I think that is an important thing for our investors and for you all as analysts to understand about the go-forward nature of the Matador business, is because the Delaware has such prolific rock and multi-zone development is an important piece of how to develop that rock, there will be some larger batch sizes, and those larger bat sizes will naturally have some lumpiness to production as they come on because, when they come on, they're really, really prolific. But even with the efficiencies that we are capturing across drilling and completions, there's longer cycle time to having some of the bigger programs than there has been when it was kind of individual or paired developments.

Our next question comes from the line of Leo Mariani from ROTH.

I was hoping you guys could talk a little bit kind of uses of free cash flow here. Obviously, you guys referred to the brick-by-brick program here in terms of M&A. So I was hoping you could kind of comment a bit on what you're seeing in the M&A environment. And then obviously, here and second quarter, you guys bought back a decent number of shares, I guess, for the first time in the company's history, roughly 1%. So could you maybe kind of talk to both of those and how you sort of balance that initiative? And is the buyback going to be fairly price-sensitive here?

Sure. Thank you, Leo. I think first off, just to kind of level set how we think about it. So we think about free cash flow post the dividend because we view the dividend as sacrosanct. And so with that, after you pay the dividend, the remaining free cash flow in any quarter, we think about as how are we going to drive the best value for shareholders over the long term. And with that, we kind of see a couple of different buckets. There's really 3 that we think about.

The first of which is the brick-by-brick land acquisition to kind of reinvest and replenish our inventory life, which we think is very important and runs continuously. It's a strength of the Matador team. The second is, as you noted, the share repurchase program that we have a $400 million authorization on and we're active in the second quarter, in our first quarter of having it. And then the final is balance sheet management and paying down debt.

And I think really a lot of people have asked us about, is there going to be a formula or is there a specific way to think about how we do that in the future? And as we look at it, we think about the value that can happen. And frankly, the way that the brick-by-brick works, we want to make sure that when we have those opportunities, we can capitalize on them. Similarly, we can't predict the macroeconomic volatility, but when it happens, we want to use the share repurchase program to capture that. And within all of this, we always want to be mindful of kind of leverage and driving total debt down over time as well.

So I think that's really how we think about it. I'll let Bryan Erman jump in on more of the A&D specific.

Thanks, Bill. This is Bryan Erman, Co-President, Chief Legal Officer and Head of M&A. And I think just to reemphasize what Bill said, we really do view the brick-by-brick approach as a strength of the company. That's something we've always done, is something we've always had a lot of success at. And I think as the market currently is a little more focused on that versus the bigger deals. We view that as a competitive advantage for Matador.

As far as the quarter, it was just another typical execution on the brick-by-brick approach, all over the basin, focused mostly in and around our existing units, but really all over the area. And again, just something that we view as a real advantage to Matador.

Thank you. Ladies and gentlemen, this ends...

Go ahead. Are you ready for closing remarks?

Thank you. Ladies and gentlemen, this ends the Q&A portion of this morning's conference call. I'd like to turn the call over to management for any closing remarks.

Thank you very much. Thank you for all your questions. I thought all the questions today were very appropriate and good inquiries. I hope we've answered them. If not, call us back and we'll discuss them with you. So we invite you to do that to be sure that you've gotten your questions answered.

The second thing I'd just like to note, I hope that you can see is that Matador has now grown to a part where we have appropriate approximately $10 billion to $12 billion in assets, depending on oil and gas prices and the other opportunities. But we have a team here, a true team of everybody pitching in. And we collaborate and work on this together. And it's been a steady process over 40 years. I started in 1983 with $270,000. And we've enjoyed over those 40 years approximately a 20% year-after-year growth in value. So 20%, $270,000 to $10 billion to $12 billion in assets.

And obviously, you all know me, it wasn't because of my brilliance at all, but I've somehow been able to, year after year, attract the talent to spur that growth. And we're really very excited the way everybody has been pitching in and helping ideas and getting a little better every day.

We're in a more complex environment today than we have probably at any time in our past, where Washington is bouncing the ball around and you're not sure where it's going to land. And we're trying to maintain maximum flexibility, but continue that growth, not only in quality of production -- amount of production, but in the quality of the production, and creating the flow assurance that we can get our product out of the basin, and continue to try to upgrade our people and bring on young people.

We have a big internship program, 30 people this year. And the people in the field, we think they're remarkable and how they take the initiative and keep the plants and the wells going, and very grateful for them and the banks. And everything seems to be coming together, that we can continue to offer consistent growth over that time, industry-leading cost and the knowledge that we've been the first movers on a lot of new formations out there in the Delaware over the years.

So we think things look very promising to us. We're excited. And the real issue is there's a lot of things up in the air, as we know, in Washington, in the environment, in the market. And so we're trying to keep this balanced approach guided by the fact we don't want to increase production if we're not increasing cash flow. And we don't want to be just increasing cash flow and not replacing and adding to our reserves.

So very pleased with the growth and continued growth in reserves, continued growth and profitability. And ideas, Andrew Parker and his group, VPs are doing a great job of coming up with more ideas all the time and refining their study.

So that's -- on this call, I know you've asked questions. I hope we've answered them, but at the same time, supplied you with the notion that internally we are very optimistic. And you probably saw that in the last open period where our leadership, we had more insider buying than any other company. And significantly, to me anyway, having run this company from 40 years, we have shareholders, we have an employee share purchase plan, and we have over 95% participation. So tremendous support from the people on staff to take advantage of it and can see the growth.

So we like our chances. The organizations come together, the finances are there, plenty of dry powder, some great technical work, and having worked all over the basin. We have, as Tom was prime to give you a rundown in all these different areas, we had good ideas and good plans. So once again, someone mentioned this, I truly want to invite all of you all at one time or another, come visit with us, get to know us a little bit better. Have lunch or breakfast with us. Meet our young people. And we'll be -- we'll do our best to answer all of your questions, and just try to get to know each other better.

And I think you'll see that this is what's great about the oil and gas. It's a win-win business. And we're here to win it for our shareholders, but we're also here to win it for you and others and gain your trust and confidence.

So with that, I'm going to sign off. But really offer the sincere invitation to come and see us. And take us up on that and let's continue to -- you all do your job, and we'll try to do ours.

Back to you, Gigi.

Ladies and gentlemen, thank you for your participation today. This concludes today's program.

These guys, they don't leave me. Let me go up here and add [ hocket ]. They give me a script. So I'll try to stay on script. But I want to thank all of you for being here and really what a thrill it is for us and hopefully, all of you to think that we have some of the original 17 investors that are here today. And Barry and all the original and Bruce, you do it, too, stand -- please stand and let them say these are some of our 40-year shareholders. Paul Harvey, you're in that group, stand up and let them see you too. And anybody else that was in that original group because we didn't have any production and they were investing in a guy that was in a little windowless office and he had a baby on the way. And so no risk just do it.

So we started with that $270,000. And today, we believe we have over $11 billion in assets. So that's a lot of good people pushing on the rock. And I want to thank all of you for staying with us and being a part. I even see a guy that I taught accounting when I was at SMU here today. And so when you ask your former students to come invest, I go, hey, I taught you accounting. I've already passed it. I don't need to do anything else. But I'm Joe Foran, Chairman of the Board of Directors and Chief Executive Officer, that this has been -- what's different about Matador is when we hire, we try to find people who want to build a company as opposed to just a job. And this has been an endeavor we didn't come up through private equity, but through friends and family. So we want to be available to you. And if you have questions, please call us or write a note or grab us after the meeting.

But I haven't gotten a count yet. Mac, do you have a count at all the people that are here today? All right. I don't know. I estimate it looks like more than 250. So I'm going to be real careful what I say today. And before we get to the items, one of our -- part of our staff has -- would like to share a video with you made about the origins of Matador. Then I wish to show you some slides about the progress that we are making. So Mac, are you ready?

[Presentation]

That was done by Rick Alexander who is Head of our Measurement Group and really does a fantastic job. Rick, where are you? Stand up and take your bat, way back there. And he wasn't asked. He actually did that as a volunteer, and he came in my office and he said he had this video he wanted me to show at the annual meeting. And I didn't know whether that was going to be about his kids on vacation or what it may include or he's also proud of his basketball shot. So I didn't know whether -- and he placed the guitar in a group. So I didn't know whether he was going to be playing music or shooting a basket or -- so great job, Rick. Thank you very much.

Now we will now proceed with the formal portion of the meeting. I will act as Chairman of the meeting, and I have asked Bryan Erman. Bryan, please? There you are, our Corporate Secretary, to serve as Secretary of the meeting. And to begin, I would like to introduce the members of the Board of Directors of the company in attendance today. And again, talk about our directors. I think we have a great group who are very giving of their time and expertise and the way they work together to thrash through the problems and make sure pressure test the decisions and the plans, and it makes such a difference to have a group that cooperates and works with people and if you get a chance, I hope you'll get to meet them because they're just -- they're regular people trying to do a good job for the whole group.

I'll begin with Tim Parker, our Lead Independent Director. He was the former Head of the Energy Practice at T. Rowe Price, and he's knowledgeable in all aspects of the business. And this is unusual, somehow our business got a little bifurcated. You have people who know the financial side and you have the people that know the operation. And there are just a few people that know both. And Tim is one of those, and he's helped get all the directors in exchange where they are all now at least conversational on both sides of the business. And I think that set a tone that has served us well. And -- so Tim is good. I'm saying in other words, he's good at finance, he's good at operations, and he's good at director work.

The next director is Gaines Baty. And Gaines, we met coaching our boys in baseball. And what makes Gaines so helpful is he's a C-suite recruiter and has really helped raise our hiring standards and how to identify talent and potential. He has discerning wisdom as well as assessing great skill at assessing an individual's potential integrity and character. Thank you, Gaines. And he was a pretty good little league baseball coach.

The next is Shelley Appel. Shelley is Nancy's and my fourth-born child, and she is a graduate of Yale with a degree in Cognitive Science with her concentration in decision-making as well. And I got to say when your child is studying in decision-making, you're going to be questioned from time to time. So -- and then after working for the CFO of the New York Stock Exchange, she attended University of Chicago with a degree in finance and then worked for Shell in their M&A group.

The next director is Rey Baribault, who is the leader of our technical groups and studies. He's a reservoir engineer from LSU. He worked at Exxon, then Netherland and Sewell and then started a successful oil and gas company in the Bakken. So he's well acquainted with these unconventional resources and is widely recognized as one of the best engineers in the business.

Then we have Bill Byerley, and Bill Byerley has become one of our key members. He was the Head of the oil and gas practice at PwC. He led the audit team when PwC, was hired to audit Conoco and Exxon, a man of good wisdom that asked some of the best questions of anyone and make sure there's 2 areas when I started the company, I wanted to be sure that we were careful on. One was the head of the Engineering Committee that estimated the reserves we had each year, and you didn't want anything to happen there where you were -- they went off and wrote off these reserves and you had a big loss. And so those have always had a lot of integrity. And the second area is in the audit that you didn't want any write-downs on assets. And again, point over here to the PwC, what a fantastic job they've done through the years of making sure that the reports and financial statements we send to you, you can trust.

Then another director that I had not known for a long time, but has certainly made large contributions is Monika Ehrman with the interesting background of having been a petroleum engineer, a Vice President at Pioneer, and she is now the leader of the oil and gas program at SMU School of Law. So again, somebody as they all are, very knowledgeable in both finance. And then Paul Harvey, who has been a shareholder for 42 years and seen us all through the growth from where we had no assets to where we are today and a close friend and adviser to me and different ways, and he helps us along with Paul Flowers with our messaging and financial efforts.

The next is Ken Stewart. Ken actually helped incorporate this Matador and where Paul has been a shareholder for 42 years, Ken has been a long-time shareholder, but only 35 years and helped incorporate us, and he was formerly the Global Chair of the international arm of Norton Rose Fulbright and Managing Partner of the U.S. region and the Partner-in-Charge of the Dallas office. His practice focused on merger, acquisition, financing and joint venture activities for both public and private companies. So you can see where he has plenty of expertise to share with us.

And finally, Susan Ward, who is a chemical engineer from Villanova, MBA in finance from Wharton, 20 years at Shell, including 12 years as a senior executive, Head of M&A, Commercial Finance for all Shell's business in America. And she was the CFO when Shell took their pipeline company public.

So these are all well-qualified people but work extremely well together. And I say thank you to all you directors and ask all to join me and give them a round of applause.

Now I want to thank the shareholders who served on the Shareholder Advisory Committee for Board nominations with Ken Stewart, who chaired that committee and Tim Parker. These are those shareholders, David Lancaster, who is formerly CFO and EVP of Matador and a genius reservoir engineer and a good friend and emphasis on good friends and Bob Garrett, who is a leading real estate professional in Amarillo and one of the best negotiators and long-time shareholder that I've known. Julie Forrester Rogers, former Director and a long-time professor of law at SMU. And when she took the bar exam, she made the highest grade of anyone in the state.

And then finally, my friend, George Yates, who asked if he could be forgiven for missing this meeting, which is the first he's missed. It's his 50th anniversary. And I don't know why he could come here or go on a trip with his bride of 50 years. Imagine that. And he picked his bride, but he's been a great friend and a dedicated and respected oil and gas operator in New Mexico. So he brings a lot of actual experience drilling and working deals in oil and gas in New Mexico. He's now -- most of his efforts is overseas in Spain and England, and we'll get him here next year.

As you probably saw with this morning, in our press release, Matador and San Mateo both made several important promotions this week. I would now like to invite our Co-Presidents, Van Singleton and Bryan Ehrman, to introduce our officers and staff. Van, Bryan?

Thank you, Joe. It's an honor for Van and I to get to introduce our officers and staff today. They really are what makes all this happen. The few of us that get to come up here and brag about all the accomplishments. It's a real honor to do that, but these are the people that are doing the work that makes it possible. So we really do want to recognize them, not just the people here in the audience today, but as Joe mentioned earlier, we have people at the office, participating there and in the field. So I really want to recognize them.

I agree with Bryan. We've got so many important things going on today that would not happen if it weren't for all of the staff and management here in the room, the Board and like Bryan said, everyone at the office as well, who hopefully are still there working really hard on all the important things that need to get done today. But for the ones that are here, we did want to recognize you and have everyone else kind of see your faces and names. And if you have any questions, feel free to go up to any one of them and ask away. If you would, we're just going to kind of go by groups, and we'll call out. I think will -- all of our EVPs, please stand and be recognized.

Would all the Senior Vice Presidents stand up as well?

Now our Vice Presidents, please stand.

And would the other staff members that are in attendance, please stand. And I would also note that these people are not just employees, but most of them are also shareholders, which we're really proud of as well.

Next, we have a couple of people, and this is a really difficult part because so many people on the staff are doing so many good things, very important things. But we can't recognize everyone we don't have enough time. We'd be here for the rest of the week. We do have a couple of people we'd like to recognize for just recent news. And so one in particular, which you all may have seen in the announcement this morning, but Bill Lambert, if you could stand, please.

And anyone who hasn't met Bill, we've just brought Bill on recently, and we're making a few transitions, as you saw in the release, and Bill is going to be our CFO going forward. Met Bill a number of years ago and got to know each other really well and decided he was somebody that if we could ever get him, we wanted him on the team. And in the last 6 months, that opportunity came up, and we took advantage of it, and we're really glad to have Bill with us. He has a great resume, if you have a chance to look at it, engineer, MBA, was in the finance end, in the banking end and then BD, business development at Devon most recently, and we're really glad to bring him on to our team.

Bryan, do you want to add to that?

Yes. Just to pile on, I mean known Bill for a while and from his Devon days and really excited that he's -- we got him to join the team. And I think as Van said, the diverse background that he has from operations to banking to working at a company, I think, has a really, really great perspective, and we're excited to work with him.

We also want to recognize Jon Filbert, our EVP of Land. Jon Yes. Like I said, Jon leads our land department. I know number of you have heard of our Ameredev and advanced deals. Jon was a huge part of that, not only getting the deals done, but then integrating 2 really big transactions, which is a huge feat. The other thing that doesn't get as much attention, but is just as important is our -- what we call our ground game for smaller acquisitions. And so in 2024 alone, we added over 17,000 acres to that. And so -- and that's exclusive of the Ameredev deal. So that's a lot of work for a lot of smaller transactions, and Jon is the tip of the spear on that, and we really appreciate all he does.

Jon, don't sit down quite yet. I'm going to add on a little bit there just that Jon has been with us over a decade. It's been really interesting and fulfilling and rewarding to watch Jon grow as the company has grown. And as Bryan said, really taking the lead in the land department and getting all these deals done, plus a lot of other things. And I just want to say, Jon, we're really proud of you. We're so glad you're part of the team, and we've got lots more to come and have big expectations for you. So keep it up.

We'd like to recognize 2 other folks, Justin Hosp and Sean O'Grady. If you guys could stand for us real quick. Recent news, these gentlemen have been leading the charge to get our midstream Marlan plant expansion done, and they have gotten that completed. It is online. Everything is working well, and they did it on time and within budget. So we're really proud of these guys. And that's a consistent answer that we get it from them. Whenever we ask them to do something, they get it done on time and under budget. So thank you guys very much. Bryan, do you want to add to that?

No. I mean just really appreciate all the work that you did to do that, both you guys and the whole team. I know there's a lot more people involved in that, and it's a huge feat to get something like that done and to do it on time and on budget is even more special. So congrats to the whole team.

One final remark, and then we'll get out of you all's way and let things continue. But just wanted to say thank you to everyone here, all of the shareholders. Thank you for attending. It means a lot to us, and we hope that this is meaningful for you. And thank you to the Board for your continued support. And Joe, you all keep us going. And I think our efforts in recruiting and constantly trying to keep that quality high has led to the results that we see today. And so we just thank you for letting us do what we do and helping us along the way.

Now I'd like to introduce Shelley Appel, who is going to introduce a few of the guests attending our meeting this morning. Thank you.

Before Shelley introduces, I just want to give you an idea on the magnitude of the growth of our Midstream system. We did this when we were going public back in 2012, everywhere we went, we were asked, how are we getting our gas out of the basin. We weren't having any trouble at that time, but knew because we were getting the question from everybody on the non-deal -- on the deal roadshow that others were having it. And so when we discussed that, it was suggested to go back and get Gregg Krug. Gregg, will you please stand?

He's been our mastermind. He has a career he grew up in the gas camp as a mastermind of that part of the business. And it's so critical to have that flow assurance that we see more and more every day. And I want to thank Gregg for coming back with us and master mining it, and we have grown that. Our original plant was 60 million a day of processing, which sounded a lot to me. Today, our capacity is 720 million cubic feet a day. All done, I wouldn't have undertaken that risk unless Gregg was around. So we keep an ankle bracelet on, monitor his movements at all times. So thank you, Gregg.

Well, thank you. It's a pleasure to be here today and recognize some of our special guests in attendance. Would each of you please stand as I introduce you? And would everyone please hold your applause until the end. First, Kim Kesler, Chris Stakem and Derek Burns from KPMG and members of their team. KPMG is the company's registered public accounting firm for the year ending December 31, 2025. Mr. Stakem will be available to respond to any questions you may have for KPMG.

Also in attendance is Preston Bernhisel and Rusty Shellhorn of Baker Botts LLP and members of their team. And Jason Schumacher of O'Melveny and members of his team.

And additionally, we'd like to recognize the representatives in attendance from members of our bank group, including David Dodd from PNC; Garrett Merrell from Comerica Bank; Jay Salitza from KeyBanc, Bryan Chapman from First Horizon Bank; and Tim Perry from RBC.

And finally, we'd like to welcome some of the research analysts who cover Matador, Scott Hanold of RBC Capital Markets; Zach Parham of JPMorgan; and Noah Hungness of Bank of America Securities, Inc. So all of these individuals have contributed to Matador's success over the last year, and would you please join me in a round of applause to thank them. Okay.

And I would like to now invite Monika Ehrman to thank and recognize retiring Director, Bill Howard; and our newest Director, Paul Harvey, who joined this year.

Thank you, Shelley. On behalf of the Board and the entire company, I want to extend our deepest gratitude to Bill Howard for his dedicated service since joining the Board in 2021. As Co-Chair of the Marketing and Midstream Committee, Bill brought a wealth of industry knowledge and strategy that was beneficial to Matador. His decades of experience in petroleum marketing and trading, which included leadership roles at Texon and Tripetrol, where he served as the NYMEX Crude Oil Advisory Committee as well as long tenure as a trustee of Complex Private Trust made him an invaluable voice in shaping our approach to Midstream and marketing operations. It was a pleasure to serve with him and a privilege on behalf of the entire Board. We are so grateful for his service.

We are also delighted to welcome Paul Harvey to our Board of Directors. Paul joined the Board in January 2025 as an Independent Director. He brings over 40 years of investment experience as both a Portfolio Manager and a Private Wealth Adviser with deep expertise in asset allocation, risk management and portfolio construction. Paul is a private wealth adviser, was former Chief Investment Officer of Vaquero Private Wealth. And before joining, he was a Managing Director of BlackRock. He was also previously served as Regional Director and Portfolio Manager with Merrill Lynch's Asset Management Group. Paul's leadership roles at these companies reflect a career that's defined by excellence and strategic foresight. Paul holds an MBA with a finance concentration from SMU Cox School of Business, and a BBA from the University of Texas at Austin. He's also a CFA and earned the Certified Private Wealth Adviser. We are so excited to welcome you, Paul, to the Board and are confident that your insight and guidance will be tremendous assets to Matador.

Thank you. I'd like to turn it back to Joe.

Thank you. And to share with you some of that progress in a more effective way than me trying to talk about it. We have a series of slides I'd like to share with you. And if you're ready back there, Mac, okay, we'll go. First, it's 40 years of generating shareholder value from Matador 1 to present. And when people ask us, what is the way you get there from $270,000 to over $11 billion in assets. It's just a lot of people pushing on the rock and just staying with it. So it's a people -- our business is a people game. It's a decision-making game, and it's -- and it just takes a lot of people to get it done. And I just appreciate my wife, Nancy, and I appreciate you all so much being involved all these years, and it's truly a team effort.

So there you go. So what is -- the building blocks is trying to generate cash flow margins, and we're right now ranked first in our peer group for making more money per barrel of oil produced than anyone else, trying to keep a strong balance sheet. And again, the banks have really helped us there. The quality drilling, we have a geological group headed by Andrew Parker that does a magnificent job coming up with better and better prospects in what is truly the core of the Delaware Basin, not on the fringes, but in the core. And over again, they've identified new targets. We went out there with the idea of having 2 or 3. And I think we're up to -- Andrew, what is it? 17 zones?

We drilled over [indiscernible].

Okay. I'm sorry, I could only count the 17. You have to have a little higher math experience to get that 20, but great job. And then in getting that, it's so much of a really good land work. And I credit Van Singleton, who was up here earlier, he doesn't call a lot of attention, but he gets the groups together and they go out there and get the deal. So will the land group please stand. And Van, these are called Van's boys and girls, and they really get it done. I mean it's -- they're out there on the road. They're writing offers every week. They're out there on the road, traveling different places, building the relationships, and it shows. So thank you, Van.

The midstream business, as we recognize Gregg Krug for his ideas that worked out so well for us. And we have flow assurance and our plants are running 99% of the time. Third parties are not that high. When it freezes out there, they shut the wells in and come back after they -- after that's over. But our guys get out there and sleep in their cars and whatever. And so again, I attribute that a lot to the fact with the employee share purchase plan we have, our participation rate in the past has been about 95%, which is almost unheard of among companies. Well, this year, it's grown to over 97%.

And so that little extra effort, we believe, pays off, steadily increasing dividend. We're up to -- we started with $0.10, and we're up to $1.25. And as commodity prices go forward, we'll consider raising it again. We're not on a deal just once a year, but we look at the cash flow, and we look at the situation and the Board will consider that. The share repurchase program, we believe, has been real successful, and you'll get more details on that. And the last thing is these accretive acquisitions. So we are buying what we call the brick by brick, but we're also doing $2 billion deals, and we've done 2 in the past 2 years, the Advance and the Ameredev. And that -- look, it put us in a new league and very excited, and they've turned out better than expected and the integration of it with our own operations has gone much smoother than we anticipated.

That's a picture of the plant. And you can see it's complex. It's a $200 million job. But again, it assures you, and as I keep saying, if you're going to be a cotton farmer in Dawson County, Texas, you better own part of the cotton gen if you want to get your product to market. And it's the same deal here. If you're going to be a major gas producer in the Delaware, you need to have your interest in the plants, and it's created a lot of other opportunities for us, too, that we'll talk about years to come. That's the capacity moving from 60 million in 2016 to 720 million today. That's the profit margin that I referred to. And down there, they list the companies. We don't want to criticize our competition. Their names are there, but we don't identify them as which peer they are. The important fact is we're doing better than they are and plan to keep doing that.

So this is the stock purchased by the staff by the senior staff. Those officers been 38, 55,000 shares, $.6 million. And -- all right. Let me worth this and over 95% participation in the employee share purchase plan. Somewhere -- and we are the only senior management group among our peers that has been buying. We've been buyers, everybody -- all the other peers have -- when you calculate their aggregate transactions, they're more sellers than buyers, but we're more buyers than sellers.

This is our land position that given Van and his group, Jon, we started out over there, just scattered when we went public in 2012. But today, over 200,000 acres out there, and we're 1 of the 5 largest in New Mexico from having -- starting from a standing start, great effort by the land group. I've got a heavy thumb.

And why do we consider this the most prolific basin in the United States and others? And what you see is this column, there's targets, oil-bearing zones up and down here, 5,000 feet where -- and here's the Midland and here are the other basins that you hear about out there, the Niobrara, the Eagle Ford, the Bakken and the like. And this is why this is going to be the gift that keeps giving and why we feel strong about the quality of our assets.

We have a corny expression in the office of profitable growth at a measured pace. And we don't -- we want to grow, but we don't want to take just huge amounts of risk. So we try to stay steady, make sure it's profitable and then keep it going.

Our Board members, you've seen them. And I hope you get to know all of them and have a chance to visit. It's a distinguished Shareholder Advisory Committee, recognition of our senior staff as I went through it. And again, KPMG has been a great partner. And I think Derek has been here for every audit since you all started. He's even got a parking space here.

And new directors, you heard Monika go through that. These are our slides, annual meeting, and we have -- we'll get to these proposals at this time.

Bryan? Well, I think that's pretty good. Let's give it to the whole staff.

Thank you, Joe. This meeting is being held today pursuant to the notice that we mailed to each shareholder of record as of April 16, 2025, which is the record date of this meeting. I have made available a complete list of shareholders of the company entitled to vote at the meeting, alphabetically arranged and certified as of the close of business on the record date.

Further, I have provided a notice, proxy statement and proxy and an affidavit that such proxy, proxy statement and notice, together with the 2024 Annual Report of the company were mailed to the shareholders of record on the record date. These documents will be filed with the minutes of this meeting.

Cale Curtin, Senior Counsel and Corporate Director, has been appointed to act as Inspector of Elections at this meeting. As Inspector of Elections, Cale will ascertain the number of shares of common stock outstanding and the voting power of each, determine the shares of common stock represented at the meeting and the validity of the proxies and ballots, count all the ballots and votes and certify and declare his determination of the number of shares of common stock represented at this meeting and the count of all votes and ballots. All holders of record of common stock at the close of business on the record date are entitled to vote at this meeting, either in person or by proxy.

Cale, could you please present the attendance report?

Thanks, Bryan. As Inspector of Elections, I report that there are present at this meeting in person or by proxy, the holders of approximately 116 million shares of common stock of the company out of a total of 125,201,846 shares of common stock outstanding and entitled to vote as of the record date. Thus, the holders of approximately 93% of the aggregate outstanding shares of common stock entitled to vote are present in person or represented by proxy at this meeting. Each share of common stock outstanding on the record date is entitled to 1 vote.

On the basis of the report of the Inspector of Elections, I declare that a quorum is present at the meeting for the purposes of conducting business and the meeting is legally convened and ready to transact business. A certified report of the Inspector of Elections will be attached as an exhibit to the minutes of this meeting.

As stated in the notice of this meeting, 3 matters will be considered and acted upon this morning. To expedite the actions taken, all matters of business as reflected in the notice will be presented first, and then a ballot will be taken afterwards for voting on each matter. The 3 orders of business for consideration at today's meeting are as follows: number one, the election of 4 directors to our Board; number two, the approval of a nonbinding advisory vote to approve the 2024 compensation program for our named executive officers, also known as say-on-pay; and three, the ratification of the appointment of KPMG LLP as the company's independent public accounting firm for the year ended December 31, 2025.

Speaking on behalf of the Board of Directors, we recommend that you vote for the election of the director nominees and for the additional 2 proposals being considered today.

I would now like to ask Ken Stewart, the Chair of our Nominating Committee of the Board to introduce the director nominees for the meeting.

Thank you, Bryan. As I think all of you know, our directors serve staggered 3-year terms and are divided into Class I, Class II and Class III. The reason for the staggered terms is to give the directors a long enough time to get to know the key members of the staff, get to know each other, go on field trips, get to know the business of the company in detail and be able to provide the common advice and counsel that the company needs from its Board.

The class to be elected this year is Class II and the nominees to be considered for the shareholders -- this shareholders' meeting, as you have heard, are Shelley Appel, Gaines Baty, Paul Harvey and Susan Ward. And all of the nominees are current directors who are being recommended for an additional term.

Shelley became a director in 2003, but prior to that time was well known to the Board. Shelley served as a Special Adviser to the Board in 2002 and has served as the company's Environmental and Social Governance Coordinator since January of 2001, and she is the primary author of the company's annual sustainability report, which I know many of you have seen.

Gaines Baty. Gaines was appointed to the Board in 2016. As noted before, he serves as the Deputy Independent Director -- Lead Independent Director and is Chair of the Strategic Planning and Compensation Committee. Gaines has extensive experience in executive searches and hiring and has been invaluable to the company over the years with his advice in these areas.

Paul Harvey, Paul became Board member, as you heard in January of this year. He is our newest member appointed by the Board. And in accordance with the company's procedures is standing for election by the shareholders at this first annual meeting after his appointment. While Paul is new to his Board position, as you've heard, he's well known to the Board and the shareholders, having been a shareholder of Matador for over 4 decades. So Paul has deep expertise, as you've heard, in wealth management and is providing great assistance to the company in connection with Investor Relations and investor outreach.

And then Susan was appointed to the Board in early 2024 after a distinguished career that you heard about with Shell Oil Company, and she served in many executive positions, but most recently, including Head of Mergers and Acquisitions and Commercial Finance and Chief Financial Officer for Shell Midstream Partners. So she has provided excellent insights to us in all of those areas and in particularly the Midstream area, I've learned a lot from her with respect to that part of the business. So -- we -- the Board was recommended a vote for all of these nominees.

And I will now turn it over to Gaines Baty to talk about the next proposal.

Thank you, Ken. Good morning. The second order of business is the nonbinding advisory vote to approve the 2024 compensation program of our named executive officers, also known as say-on-pay as set forth in the proxy statement.

Our compensation program is designed to reward in both short and long-term performance that contributes to the implementation of our business strategies, maintenance of our culture and values and the achievement of our objectives. In addition, we reward qualities that we believe help achieve our business strategies. More information regarding the compensation of our named executive officers is included in the proxy statement. The Board of Directors has recommended that you vote for the nonbinding resolution approving the 2024 compensation of our named executive officers.

Now I'd like to ask Bill Byerley as Chair of our Audit Committee, to discuss the final order of business of today's meeting. Thank you.

Thank you, Gaines. Final proposal for us today is the ratification of the appointment of KPMG as the company's independent registered public accounting firm. KPMG served as Matador's independent registered public accounting firm for the year ending December 31, 2024, and has served as the company's auditors since 2014.

The Audit Committee of the Board of Directors has appointed KPMG as Matador's independent registered public accounting firm for the year ending December 31, 2025. In turn, the Board of Directors has directed that such appointment be submitted to our shareholders for ratification at this meeting. Further information about the services provided by KPMG is set forth in the proxy statement. The Board of Directors recommends that you vote for the ratification of KPMG as the company's independent registered public accounting firm for the year ending December 31, 2025.

I will now turn the meeting back to Joe Foran, our Chairman of the Board of Directors and Chief Executive Officer.

Thank you, Bill. And on behalf of everyone on the Board and on the Matador staff, we thank you, directors, for the rigor and expertise that you bring to the Audit Committee and especially you, Bill. And for Ken and Gaines, we greatly appreciate all your hard work and expertise in your Board and committee assignments as well as taking the time to get to know the individual Matador staffers. And I think our Board is very unusual in that is they know who's working there. There's a real relationship. And that makes the exchange of information that much easier.

To review, there are 3 pending orders of business. The first is election of 4 directors. The second is the nonbinding advisory vote to approve the 2024 compensation program of our named executive officers. The third one is the ratification of the appointment of KPMG LLP as the company's independent registered public accounting firm for the year ending December 31, 2025.

We will now distribute ballots to any shareholders present who wish to vote in person. To avoid confusion in counting the votes, ballots should be cast at this time only if you have not previously given a proxy, if you have not revoked a proxy previously given by you or if you are now revoking a proxy previously given by you. If your stock is held in a brokerage account in order to vote at this time, you must first provide us with a legal proxy that would have been given to you by your broker, granting you the right to vote that stock in person.

Now under these circumstances, you now desire a ballot, please raise your hand, and we will provide you with one. So if that's not enough bureaucracy, seeing no one raise their hand, we will leave the ballots as they are, Cale. If you'll report on the outcome.

Yes, sir. So I'm pleased to report that each of our nominees for director has been elected to the Board as each nominee has received greater than 85% of the votes cast by the shareholders present in person or represented by proxy at this meeting and entitled to vote on the election of directors. This constitutes a majority.

The second motion regarding the nonbinding resolution approving the compensation of our named executive officers has received a favorable vote of more than 94%, which constitutes a majority of the shares present in person or represented by proxy and entitled to vote at this meeting on this matter.

And finally, the third motion ratifying the selection of KPMG LLP as the company's independent registered public accounting firm for the year ending December 31, 2025, has received a favorable vote of over 99%, which constitutes a majority of the shares present in person or represented by proxy at this meeting and entitled to vote on this matter.

Therefore, each of the director nominees and the proposals voted upon today, as described in the proxy statement, has consistent with the recommendations of our Board of Directors, been approved by the shareholders and will be recorded as such in the minutes of this meeting. I would like to remind our shareholders and other stakeholders that specific information regarding the number of votes cast for and against each of the proposals will be included in the current report on Form 8-K that will be filed early next week.

Thank you, Cale. And Cale, I want you to know your group got more votes than any of the other. I think you all were at 99%, okay. We're going to investigate that one per se.

There -- before we conclude, I would like to recognize my wife and Co-Founder, Nancy, would you please stand? In getting it started, what was really nice was she did not ask me too many questions of where the next paycheck was coming from. So thank you, Nancy, and thank you for all your help in all the different areas of the company, and we appreciate you being here, too. Thank you. She had 5 children, too.

So there -- this completes the scheduled items of business. There being no further business, the formal portion of the bank is now adjourned. And I would like to introduce our Lead Independent Director, Tim Parker. Tim was appointed to the Board in 2018, serves as Lead Independent Director and as Chair of the Board's Capital Markets and Finance Committee. Tim?

Thank you, Joe. What I'm going to talk about is pretty much what Joe talked about, and that's that this is a company that does what it says it's going to do and focus on things like profitable growth at a measured pace. You don't have inventory like this if you can't drill it and develop returns. And by that, I mean, we have higher returns on capital than most companies public or private. And that's because these are good oily wells drilled for reasonable costs and produced for reasonable costs.

We heard yesterday how we brought the cost down at the acquired Ameredev properties, which have more H2S and dangerous things we have to remove from the oil before we sell it, and we've taken $3 out of that cost. So it's almost the same cost as the rest of the portfolio. Did that in a few months. That's the kind of business you have here.

We also have this very durable inventory that Van is and team are always out brick-by-brick, little deal, little deal with the occasional big deal that every year, we're trying to replace what we've drilled and add new locations that will compete for capital. And I feel very confident saying we have 10 to 15 years of drilling inventory, engineered locations today. So there's durability to these high returns. I don't think many companies can say that either. There won't be many companies in the next 5 and 10 years that will look ahead and say, we have 10 years of inventory, it's oily and it's high return, and we have all of that.

This is also a company that has a pretty straightforward balance sheet. We have a reserves-based facility that we -- it's a working capital and occasionally for deals and such, and we've been paying that down. We have 3 publicly traded bonds. They all trade around par in the 6s. So good commercial paper. The first one is not due until 2028. So we've got some time, and we should be able to refinance it if we like. We've just been raised to BB at Fitch, one of the ratings agencies, which is one step away from investment grade. So the company is becoming a stronger financial company than ever before, thanks to these high-return wells and Midstream business.

We're also using the free cash flow, which is something new for us. We're now big enough that we have free cash flow, we have for the last few years, to pay a fixed dividend that we will continue to raise, as Joe mentioned, to acquire companies at times, to pay down debt and more recently, to buy in some of our stock when it's cheap, when it's low priced, when commodity prices are low. We're not looking to buy stock every day. We're looking to buy it when it's on sale. And so you'll see an update to that, I think, in our 10-Q, our next quarterly report, you'll see how much we bought, but stay tuned for that.

And finally, we're -- we, the Board and management, we're all aligned with you, all the shareholders out here. We own stock. We care about this company. We want you to succeed. We know you're tremendously capable people. We want to be a resource for you, guidance for you, but know that we are paddling the boat right along with you. And that's something that we're very proud that all of these directors serve on this public board. We don't serve on 5 boards. We care about this company. All of our directors own stock, some more than others, but it's -- if you ever looked, it's a lot of stock. Yes, sure, Jon is more than us to be founded. But we all care. We put our money where our mouth is. This is our horse in the race.

So we are strong believers. We're in the race with you. We want to know we are here to help. So with that, thank you.

Thanks, Tim. Well said. I appreciate it. Thank you for attending today and to those listening in on the webcast. On behalf of all the directors here, we appreciate your investment in Matador, your interest in learning more about the company and meeting with us and with staff here today.

I was reminded looking at the calendar at today's meeting that 2025 is almost half over. And also 40 years ago, this coming Sunday, Father's Day, I walked into Exxon's production engineering production office in New Orleans and started my amazing engineering journey in this resilient business. So back then, million-barrel wells were only expected in offshore fields in the Gulf of Mexico. And now today, there are common targets in the Delaware Basin. And back then, who would have thought? So we'll hear shortly a financial update from Michael Frenzel and Bill Lambert on record production levels, robust free cash flow, top-tier profit margins and the increasing dividend.

Underwriting these results, as Tim just mentioned, are the prolific wells that operations continue to turn in line and deliver to the bottom line week in and week out. And I'd be remiss not to mention the importance of the contributions of the land and legal teams who provide and prepare drilling permits for the rig schedule and the geo professionals that identify and help high-grade the formation targets in each well. Without their diligence and perseverance, the drilling operations, production facilities teams would be working from an empty playbook.

And I'd like to unpack a few examples of work here that's being done at Matador that's increasing efficiencies and driving returns on Matador's capital investments. These illustrate Matador's mantra, look ahead around the corner for new ways to enhance operations and reduce costs. Mac on this first slide, now in its eighth year -- thank you. Now in its eighth year in the Dallas office, the MAXCOM operations center continues to generate many millions in well savings annually, while helping the drilling crews consistently post new performance records in the field.

The engineers and geologists on the MAXCOM team work in concert on 12-hour shifts, 7 days on, 7 days off and in constant communication in real time with the rig supervisors and the drilling engineers at each rig. They aid in landing laterals in the targeted zones. consistently monitor horizontal steering and provide drilling optimization guidance. Their collective brain trust provides the best practices, which makes for better wells. Matador's wells average 99% of their lateral length within a reservoir target.

Drilling windows typically for targets have a 20- to 25-foot vertical tolerance roughly from the floor to the ceiling you see here over a 2-, 3-mile lateral length, which is impressive. And in some targets, the window is as tight as 10 feet. Recent records, recent drilling records that the teams have posted, the longest lateral length in the company history is 3 miles at the Charles Ling unit. And the total measured depth from surface to TD, total depth, is 28,000 feet, well over 5 miles. The most lateral footage drilled in a 24-hour time span is a 600,000-foot length over -- well over a mile in the first Bone Spring target and a record of 8 days and 7 hours to drill from initial spud to total depth for a 2-mile lateral well also in the Bone Spring, pretty impressive.

The MAXCOM center contributions will continue to grow as will the center itself with a new larger footprint in the Dallas office and IT upgrades scheduled in the second half of this year. The MAXCOM team lives and breathes, as I said, looking ahead around the corner.

Before moving to the next slide, I'd like to make mention of the near seamless integration of the Ameredev assets that the company acquired this past September. The teams across all disciplines in the field continue to move the ball forward. Tim made mention of one of those opportunities on oil, sour oil treating. They continue to move the ball forward and are taking full advantage of the many upside opportunities. Development drilling on the Ameredev asset base will ramp up in earnest shortly. There's currently 1 rig running and several rigs will move into the asset area in the coming months. One of those drilling units is a 3.5-mile unit with multi-wells planned there, 3 rigs, 3 pads.

Moving on to the next slide. With this slide, I'd like to update you on the U-Turn drilling concept that I made mention of at last year's shareholder meeting. Matador was an early mover with this technique back in 2023. This new tool in the toolbox is being used to develop reserves in what we sometimes refer to as a stranded 640. This slide depicts a top-down plan view for a 1 square mile 640-acre section or spacing unit. So when adjacent square mile sections are not able to be joined together or what we call unitized for whatever reason to form a typical rectangular 2-mile 1,280-acre unit, we're left with a stranded 640. And by today's standards, the economic return on drilling a 1-mile horizontal in a 1-mile unit doesn't compete with longer lateral metrics.

On the right-hand portion, you see here, we're depicting how Matador is developing 1-mile 640-acre sections in the company inventory across all its asset areas. To date, Matador has drilled 17 U-turn 2-mile lateral wells, 2 in 2023 that I mentioned last year, 5 in 2024, 10 so far year-to-date with another 8 additional wells planned for the second half of this year. The production performance importantly, as executing mechanically on a U-turn well, the production performance results of the 2023 and 2024 U-turn wells are tracking with the same barrel per foot recovery efficiencies that are analogous to their neighboring straight 2-mile lateral wells. Going forward, the U-turn wells are likely to comprise roughly 10% to 15% of Matador's gross annual well count. So in a literal sense here, this is an example of the drilling team looking ahead around the corner.

The next slide, what I'd like to show here is what demonstrates the continuing successful application of the company's latest trimul-frac operation. In this instance, at the Emmett/Prater 1,280-acre spacing unit in the Rustler Breaks area. The opportunity here that Matador had was to complete stimulation operations on 12 newly drilled 2-mile lateral wells comprised of 2 separate 6-well pads. And those 12 wells developed the First Bone, Second Bone and Third Bone Springs targets. So what the teams did was develop 4 wells per horizon, fully developing the spacing unit in each of the 3 formations. So what essentially you're seeing here is what would be analogous to a very refined manufacturing process.

The operation pictured in this slide shows NexTier's hybrid frac spread on the 6-well Prater pad. A hybrid frac fleet is now standard operating procedure for simul-frac and trimul-frac operations. hybrid fleet referring to the use of both electric-driven pumps as well as dual fuel pumps. Dual fuel pumps can run on either diesel or field natural gas. For this operation at the Prater pad and then successively at the Emmett pad, which was just north of this pad in the unit, Matador leveraged San Mateo's Midstream infrastructure to use both recycled produced water for frac supply load as well as field natural gas from the nearby Black River gas plant to run the dual fuel pumps.

The 12-well development of the Bone Spring zones in this unit reduced cost by $1 million per well and resulted in 20% less days per well when compared to last year's Matador average for drilling Bone Spring wells in this asset area. So this now is standard operating procedure going forward for multi-well pad development on simul-frac and trimul-frac operations, say that 3 times, with repeated -- with highly repeatable metrics. And Matador's superior asset base in the Delaware Basin, both downhole and above ground with a distinct mix of production and midstream facilities, combined with its talented professionals and tireless field operations staff are consistently delivering high returns and growing shareowner value. First and foremost, geology matters. And the 3 eyes I refer to ingenuity, innovation and infrastructure are front and center at Matador.

Speaking of midstream operations and marketing, I'll pass the podium on to Susan. But I'd like to finish by asking you to recall the tagline from the old Kevin Costner movie, Field of Dreams. If you build it, he will come. For the midstream and marketing teams, their call to arms is drill it and we will come.

Thank you for your attention and interest in Matador and your support.

Thanks, Rey. Good morning, everyone. Joe asked me to talk to you today about my observations as a relatively new director with prior midstream experience on the progress and outlook for Matador's growing midstream business, and I'm delighted to do that.

While Matador's E&P operation has been in business for over 40 years, the midstream business was only established in 2015. Midstream conducts 3 streams of operations, natural gas, produced water and oil, supporting Matador's exploration, development and production activities. Midstream provides natural gas gathering and processing with nearly 300 miles of pipeline and 720 million cubic feet per day of gas processing capacity, produced water gathering and disposal services with 180 miles of pipeline and 16 water disposal wells having 475,000 barrels a day of capacity and oil gathering and transportation, including 110 miles of pipeline and 3 central delivery points with 90,000 barrels a day of capacity.

One positive of the 2015 start is that most of Matador's midstream gathering and processing base is young equipment from a useful life standpoint. The result is a more efficient and reliable midstream operation for Matador and its partners as well as for third-party producers also keen to evacuate production in a timely way. Producers cannot flare natural gas associated with oil production in this area. And if offtake arrangements are not in place and functioning when production is ready to come on stream, the cash flow associated with the new production is delayed. Thus as Joe mentioned, flow assurance and the reliability of midstream operations are critical.

In the last 18 months, Matador's Midstream team achieved an availability reliability of over 99%, almost perfect and I think significantly above competition. Most of the company's midstream operations are conducted through its majority-owned San Mateo joint venture with the private equity group, Five Point Energy. The assets are primarily located near Matador's E&P operations in the prolific Delaware Basin of the Permian in Southeast New Mexico and West Texas.

The messages I'd like to communicate to you today are that Matador's Midstream is growing, it's material, it's profitable, and it represents significant current value to Matador and to you with the potential to add much more. Over the last 10 years, Matador has grown the value of the midstream assets from nearly 0 to $1.5 billion as midstream throughput, EBITDA and free cash flow have grown to record levels. Matador has found innovative ways to grow the segment while providing free cash flow back to the parent to redeploy to profitable E&P development opportunities or to repay debt for E&P acquisitions, pay dividends or acquire -- make share repurchases at good prices.

Much of Matador's midstream cash flow is generated under 15-year fixed fee contracts for essentially all of Matador's acreage. These midstream cash flows are generally considered more predictable and less risky than E&P cash flows, which are subject to commodity price fluctuations. These more predictable midstream cash flows are highly sought after by lenders, and other potential investors and are sold in both the public and private M&A market at high relative valuations.

There are many advantages to Matador owning and operating an embedded integrated midstream business. First, flow assurance for equity production, including sour gas; second, significant positive free cash flow to the parent to redeploy to continue to grow the company's E&P base; third, good opportunities to generate incremental profitable volumes and free cash flow from blue chip and repeat third parties; and finally, it gives Matador the potential opportunity to develop and use a new currency. Among several private and public strategic alternatives, Matador and its San Mateo JV partner are exploring the option and benefits to establish a publicly traded midstream entity.

Historically, midstream companies have traded in the stock market at high relative valuations. For example, currently, gas gathering and processing companies are trading at 8 to 12x forward EBITDA compared to independent E&P companies at 3 to 5x EBITDA. So you can understand the arbitrage there. From its beginning, the company has made smart choices to grow its midstream business. For example, over the last year, relatively short new pipelines have been constructed to connect the system of gathering pipelines and processing plants that now resembles a loop with the potential for volumes to be moved in other different directions to fill spare capacity and meet individual customer needs in the most profitable way for Matador.

The company has also been active on both sides of M&A, taking advantage of circumstances to opportunistically buy and then sell later at high values. For example, the nonoperated equity interest in Piñon Midstream that Matador obtained through the Ameredev acquisition last year was subsequently sold to enterprise for $115 million. That stake was not highly valued in Matador's bid for Ameredev. The sale proceeds were used to repay debt taken on in the E&P acquisition.

In another recent example, 100% of the relatively new Pronto, now Marlan plant was bought in 2022 and in a distressed situation from a competitor for less than $80 million. So not that long ago. At the end of last year, just 49% of that was sold to Matador's San Mateo partner at a much higher value, $220 million cash plus other commercial arrangements, including future incentive payments. The terms of that transaction also included a sour gas solution for Matador and simplified its midstream holdings. Those proceeds were also used by Matador to repay E&P acquisition debt.

And just last month, the company, as you've heard, placed in service a 200 million cubic feet per day capital expansion of the Marlan plant that took over a year to plan and execute on time and on budget, a fantastic achievement. This expansion of an existing plant increased the Matador's overall processing inlet capacity by nearly 40%. The quality and location of the assets are important, but where Matador also differentiates itself from its peers is in the employees' knowledge and commitment to teamwork, continuous improvement and customer service. Matador's unique culture of safe, low-cost and reliable delivery stands out to me.

Importantly, Matador has a very experienced and professional midstream team, as you've heard already, including Gregg Krug, Brian Willey, Rob Macalik, Michael Frenzel, Sean O'Grady and of course, on the other side, Justin Hosp, Tara Flume and Chris Tennant. Todd Parker and Scott Walker work on the MBD with Brooks Forshaw and others to work seamlessly with the upstream business leaders. What's impressed me is how well this team and the field staff supporting the business and other functions like finance, marketing with Anton Langland and Measurement with Ricky Alexander quickly communicate and work so well to identify and pursue time-sensitive profitable opportunities. These can only be captured if the team really understands the operations capabilities and the potential integration value of the assets and work selflessly to make it happen.

The track record and bright outlook show they do. Thank you.

Thank you very much, Susan. And a couple of people I hadn't mentioned, Billy Goodwin is here, and Billy is one that really raised our drilling from 1 rig or half a rig to where we were drilling 9 rigs or more and having the highest quality rigs out there. He and Josh for sure. And so thank you very much, Billy. It's good to have you. And Paul Flowers, who's worked with Paul Harvey on our messaging. Paul, where are you? There. Thank you, Paul. I just couldn't see you over there right away. But he's also a part of the handball group that -- and been a great friend, one of the first friend that I made when I got to Dallas.

I'd also like at this time to recognize Michael Frenzel. Michael is our Executive Vice President and Treasurer. He interned at Matador beginning in year 2000. So he's accumulated 25 years here. and he really did start when he was 16, I think. But prior to joining Matador, he worked as an investment associate at Hamm Capital in Oklahoma City and as a financial analyst and assistant to the CEO at Continental Resources. So Michael make sure that we have our money on time and on budget, right?

And then I'd like to recognize Brian Willey. Brian Willey has led our banking and finance effort and our midstream legal work as well as other work benefiting Matador. And we now leads our efforts in planning how to best grow and increase the value of our midstream business, San Mateo. So he did exceptional work, particularly as an example, with the 19 members of our bank group led by David Dodd at PNC. David, I want to raise your hand, too. There you are. And any time you get 19 banks to agree on any 19 questions, we think that's great work. So thank you, Brian.

Now I'd like to turn to the newest member of our executive team, Bill Lambert, who's been -- who started work with us and got off such a good start. The Board decided to go ahead at this meeting and name and affirm him as Executive Vice President, Deputy Chief -- not Deputy any longer, Chief Financial Officer and Chief of Strategy. Prior to joining Matador, he was Vice President of Business Development at Devon Energy in Oklahoma City. And prior to that, he was a Managing Director in the Energy Investment Group at Goldman Sachs, and he worked for Schlumberger, began his career at Schlumberger as a wireline field engineer and worked on rigs offshore Vietnam.

So Bill, I where are you? There you are. We would like to see if you'd like to say some few words on your appointment as our Chief Financial Officer.

Thank you, Joe. I appreciate the opportunity to join the team. So I have a couple of slides quickly that I'd like to go through along with Michael. But what I really want to start off with is when we look at this business, I've been an observer of Matador from the outside for a long time, for over 10 years. And as I think about it, I've always been able to look at the audited financial statements and think about how has this business in the last couple of years been driving superior free cash flow margins.

And as I think about that, it really starts with the team. And the group of people that I've had the opportunity to join are world-class. It's been a great blessing for me to get to know them over the last 4 or 5 years and spend time with them and recognize that when the opportunity came, it was a very, very easy decision. The next thing is the rock and the integrated nature of the business. When you think about it, when you can take a tremendous group of people and give them the best rock in North America and the midstream to make sure that you can move the hydrocarbon to the market, you develop a winning strategy.

When we look at the historical growth in this business, we'll look momentarily at the land position and the Midstream business that Joe and his team have built with the support of the Board and everyone in this room. And as we think about it, this growth has been at a measured pace, as Tim noted, but is something where we've maintained the balance sheet to make sure that we are able to deliver that growth over time in all markets. The ability to know when to take advantage of volatility is a real strength of this team.

So as I move forward and lay out the growth itself, I just want to remind everyone, this is a slide that I've seen, and I know you all have seen in the investor deck for a while. But just look at the left-hand side and how little red, how little land is actually on that page. When Joe started off, it was a small footprint. And it was something that we looked at from the outside and we said, wow, they've got a little bit of a footprint. And then you look at what the team, what Van and his land team, what the collective Matador team has built and you look at the amount of red in the best basin in North America, combined with the infrastructure business that has been built along the way, this is a really, really powerful position.

And when we pair that with the inventory regeneration that Tim spoke of earlier, where we think about we have 10 to 15 years of actual sticks on a map. That is a really, really unique thing. It's something that I've looked at lots and lots of basins and lots and lots of development strategies. And the reality is that is unique.

When you look at the individual wells and their performance, this slide shows well performance over time. And in my opinion, oil is where we all make money. And at the end of the day, the oil EURs here. So this is the total amount of oil that a well is likely to produce over the life of that well. When you look at that, Matador's wells produce more oil than others. That is really, really important when you think about that free cash flow and free cash flow margin that we talked about.

And the final piece, and I'll hand this over to Michael, and I just want to recognize Brian Willey and Michael's work around the way that they have positioned this balance sheet, they set me up for tremendous opportunities for success, and I'm incredibly grateful for that because the team collectively took the preventative steps at the beginning of all the volatility that took place earlier this year to make sure that we are well positioned for whatever happens.

And so with that, I'll hand it over to Michael and let him talk a little bit more.

Thank you very much, Bill. I'll be very brief in my remarks because I think Tim and Shelley both addressed what I was going to say, but we got a recent upgrade from Fitch ratings from BB- to BB, nearly to investment grade. They didn't have to make this upgrade, especially in light of the volatility that we've seen in early April. So we really appreciate their consideration in making the upgrade, and we really look forward to looking to working with them going forward. And I want to reiterate one more time the support that we've gotten from our bank group over many, many years. Obviously, PNC is the lead now, but RBC and Comerica and First Horizon have been in our group for a long period of time. And that support that we've received has been pivotal to the growth that Matador has seen over these many years. San Mateo as well.

We wouldn't be in the position that we are without the support of our banks, just like we wouldn't be in the position that we are without the support of our shareholders. But Joe mentioned that my first internship was 25 years ago. And in the last 25 years, we have not been better positioned to capitalize on opportunities as we are now. We've got $1.8 billion of liquidity, a leverage ratio below 1x, a great asset base in the most prolific basin in the country, and we've got a staff that is unrivaled in the business, in my opinion.

We'll hand it back to Joe now for some closing remarks. Thank you again for joining us.

You all can breathe easy. I don't have any closing remarks. Our staff will be available to you if you have any questions. And of course, call us any time or come see us. We are always available. You all are the owners of the business. We wouldn't be here without so many of you pitching in as you have and backing us and providing the stability during turbulent times, and we're very appreciative. And we're kind of old-fashioned. We're kind of the last of the companies that didn't come up through private equity, but did it with friends and family and kind of door-to-door. So it does mean us a lot. We are available.

And I'm just really overwhelmed with appreciation to see so many of you taking time out to come see us. Nancy, not bad for starting out that windless office. And 2 points of real pride to me. You've met some of the connections. But also, we have 2 of our VPs whose grandfathers let me have that windless office. So I like Sam Pryor and Chris Carlton, would you please -- Chris Carlton? There you are. So their grandfathers are the ones that let me have that office. And they're still can't get rid of me. They're still here and they're working, and we're all working together. We've got many stories like that. You've heard the stories about Amarillo and the people from Amarillo we've hired. And also on the -- I played rugby at Kentucky and with the rugby players from Kentucky stand if they're in here today, there's Jen, there's Derek. I know we got one more and we got another one coming.

And so I thank you all for coming. And so if you have -- and -- but keeping the quality of the people up is an ongoing goal for us. And just appreciate you all coming. You all get to have the exchange with our people at Matador getting to meet our shareholders, and I think they're the best in the business. So thank you, shareholders and other interested parties, and we're going to go out and find some more oil today. Thank you.

And the last thing I want to say, it's nice to see we have reached production of approximately 200,000 a day. Is that right? That Glenn make sure that we get all 200,000 right. And think how fabulous that is only in America, could you start in that windless office, 270,000 and end up today pushing 200,000 on the way to 250,000 or 300,000. So -- we'll get after them, and thank you all again. I hope you'll come back next year.

Meeting adjourned.