Matador Resources Company

Good morning everyone and thank you for joining to the second quarter 2022 Matadors Resources Companies Earnings Conference Call. My name is Norma 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 for one year as discussed in the company's earnings press release issued yesterday. I would now turn the call over to Mr. Matt Smits, Vice President, Investor Relations for Matador. Mr. Smits, you may proceed.

Thank you, Norma, and good morning, everyone, and thank you for joining us for Matador's second quarter 2022 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 quarterly report 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 2022 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 Chairman and CEO. Joe?

Thank you, Mac. I appreciate your help very much, and I just want to do a sound check with everybody to make sure we're not cutting out. In the pre-test, there was some indication that someone was being cut out, but if you are, please let the operator know and want to be sure we're coming in loud and clear. Where I'd like to start is on this. This is the best quarter that we've had in company history. Actually, the first quarter was originally the best quarter, but this quarter has been even better. We're proud of that. It reflects the team effort here. We feel we've gained strength in all areas and the outlook for it is strong. and we like our chances. Operationally, the big difference makers is first is the capital efficiency that you'll note in a lot of our activities, and second, the strong relationships that we've had with our vendors and outside contractors. So we have not, we've avoided a lot of the problems of the supply chain. They've been there. We've worked with them for many years. All these people, Patterson, Borland, and Leverage, Halliburton, and we just appreciate them very much, all the different elements that go into the well. And our contractors and our field people who are the unsung heroes in keeping things going and helping out and adding to that capital efficiency. Much of the capital efficiency comes from the conversion from drilling one-mile laterals to two-mile laterals, and as you'll hear later on as we're making preparations to move to some three-mile laterals. That's been the big difference maker, even in this time of higher prices, having that extra measure of capital efficiency. And finally, the financial strength of Matador has continued to grow through the years, and we feel we've reached a new inflection point point as our production has climbed over 100,000 barrels of oil or gas equivalent per day, which puts us in a position of being at the strongest time in our history from a financial or operating point of view. During this time, we've had a lot of debt pay down so that we've completely retired our commercial bank lending. We still have a borrowing base there, but we've paid all of that off, and we've also paid down our bond debt. And this has given us, of course, more options, more cash flow, and set us up for a different level that we won't have the risk profile that you have with debt and the leverage ratio has declined from 2.9 in the third quarter of 2020, say two years ago, to where from 2.9 to 0.5. So proud of that, and we're ready for your questions and what else we can tell you about Matador and our outlook and progress going forward.