Matador Resources Company

Good morning, ladies and gentlemen, and welcome to the first quarter 2021 Matador Resources Company earnings conference call. My name is Sarah, and I'll be serving as the operator for today. At this time, all participants are in a listen-only mode. We will facilitate a question and answer session at the end of the company's remarks. As a reminder, this conference is being recorded for replay purposes, and the replay will be available on the company's website through May 31st, 2021, as discussed in the company's earnings press release issued yesterday. I will now turn the call over to Mr. Max Smits, Capital Markets Coordinator for Matador. Mr. Smits, you may proceed.

Thank you, Sarah. Good morning, everyone, and thank you for joining us for Matador's first quarter 2021 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 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 quarterly report on Form 10Q. Finally, in addition to our earnings press release, I would like to remind everyone that you can find a slide presentation in connection with the first quarter of 2021 earnings release under the Investor Relations tab on our corporate website. I would now like to turn the call over to Mr. Joe Foran, our 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 interest in Matador very much. I'm going to turn the call back to the operator in a moment to take your questions. But first, I wanted to make a few quick points. First, as you all have noticed, that we have continued to make good progress on our leverage ratio. At the end of the fourth quarter, we were about 2.9, and today we're 2.5. Second is the revenues are up, obviously, on commodity prices, but even more importantly, we've substantially reduced our cost, not from hitting on our vendors and beating them down so much as working with them, which we greatly appreciate, to make our operations more efficient. And we've reduced our time on well, fracking efficiency and effectiveness, and we want to thank each of our vendors for the way they've cooperated and worked with us. But these costs have come down dramatically, and as we all know, when you have an extra dollar of revenue, the royalty owner takes his share, the government takes their severance tax, sales and use tax, and the like, and you're generally left with about 65% of every dollar. But the cost side, every dollar saved goes to the bottom line, and we get to keep. So that's a big part of the difference. Finally, I'd like to stress that we've been through a lot in the past year, and There have been a lot of challenges with the pandemic, with the weather, with prices, and working our way through that has been a total team effort. Everybody here at Matador has contributed all across the spectrum, and you're likely to hear today how our guys in the field have. They loaded up groceries in the truck and threw it in a bedroll and slept in their trucks to keep the production on. And teams here have worked together to plan the drilling schedule and to work on costs together. And the geology keeps coming up with new zones. When we went out to the Delaware a few years ago from the Eagleford and made that our main area, We were basing it on three zones. Today, it's my understanding, as Ned will probably speak up at some time on a question, we are producing from 18 different zones and think we'll be over 20 by the end of the year. So just great. Same way on San Mateo. When our production group was ready to turn on the wells, the pipes were there waiting for them. so we weren't having to truck out the oil or the water. All of it, including the gas, were on top, which was good for our ESG as well as the bottom line. So with that, let me turn the call back to the operator for any questions that you may have.