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spk09: Full year 2022 earnings conference call. Some of the presenters today will be referencing 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 forecast 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. In addition to our earnings press release issued yesterday, I would like to take a moment to remind everyone that you can find a slide presentation in connection with the fourth quarter and full year 2022 earnings release under the Investor Relations tab on our corporate website. With that, I would now like to turn the call over to Mr. Joe Foran, our Chairman and CEO. Joe?
spk14: Thank you, Mac. It's a pleasure to be here again and report to you our progress at Matador. And I'd like to begin with... celebrating what happened in the fourth quarter of 2022 first, and then we'll get to the outlook for 2023 and 2024. But beginning with the fourth quarter is we had over 100,000 BOEs per day, and we had records across – performance records across our whole – operating outlook despite the bad weather or other complications. But 100,000 BOEs per day is a step forward and puts us at a different inflection point. We had notably free cash flow of $1.2 billion and $249 million just in the fourth quarter. Adjusted EBITDA for the year was $2.1 billion. and it was $460 million in the fourth quarter. This is important because when we went public, we weren't even $460 million. So you think about we weren't even $460 million in value, and we had more than that earned in one quarter alone. Now, when I speak of quarters, we look at quarters here But we prefer to look a little longer term, six months to a year. In this instance, much of what we did in the fourth quarter was to help set us up for the end of 2023 and all of 2024. So that's coming together very well. And I think it's important we think long term around here to look at more, look at the quarter as much as you want. But we asked, looked longer too at one year because some of the things that we're deferring on now sets us up for 2024. As an example, we've got 85 by the end of the year, we'll have 85 wells drilled in the Rodney Robinson and the Boris and Vonnie properties with we have right now eight that are flowing back. We'll have eight more next year, this year, and then four at the end of the year. Is that right, Tom? Yes, Joe, that's approximately correct. All right. So now remember, we bought that Rodney Robinson and the Boris leases over four years ago, and they're still contributing. And if you add them all up, that's 89 wells and we still have more to go there. So this, uh, what happened here at this reading the analyst reports concerned about the advanced deal is it really is very similar and comparable to what happened at BLM. If you remember when we bought the BLM tracks, our stock was hammered, uh, much as it was this morning. And, Look how that has turned out. A lot of the analysts wrote, you know, that was a bad deal. We paid too much. But they just failed to look at the quality of the rock that was in the BLM and what we could do with it because that was a transformation. We went from drilling 98% of our wells as one-mile laterals to going to 98% of our wells being two-mile laterals or more. And which has been a great improvement that set us up to do this advanced bill, which is, you know, four times potentially the value of the BLM acreage. So I think that a little adjustment and absorbing that is to be expected. But we are very excited here. If you were to go around and meet with all the staff, you'd see we're – really excited about what it'll do and the program and we included in those slides a map showing how it fits in with our acreage and it's adjacent and this is some of the best rock in the whole basin and we're making great wells on what we're drilling. We're going to have this and then when we spend the extra CapEx to connect it to our pipeline systems, Prompto and FivePoint, you're going to see that much more strategic value coming out of these properties. That just sets us up for 2024. In 2022, just to remind you, we drilled 64.5 net wells. In the first quarter of 2024, at the end of the year, we'll be turning on 49 net wells. We have a practice. If we're going to connect wells, if possible, we try to set them up for the first quarter of the year so we get a full year's benefit. Think about that. The proportion that we're going from 64.5 net wells in a given year to 49 net wells of similar quality and interest in the first quarter of 2024, some of the analysts noted that we were getting things set up for 2024. And I commend you for, uh, noting that. And the last thing in talking about, uh, there seemed to be some question is on the midstream of 2023 that we have heavier CapEx. And part of that is integrating the advanced properties into our system. And if you go to the next slide, which shows where our pipelines are, we intend to connect up the pipelines so you have that system can go all across the best areas of the Permian. So you add that additional CapEx to connect all the systems and to build out to other pipelines to advance and to other third-party customers that we're signing up as we extend these pipelines, the additional CapEx, we believe, will be returned several times over. Finally, I want to just remind everybody, we're trying to signal to you that we're putting our money where our mouth is. We've increased the dividend 50% to 15 cents a share per quarter. I'm the largest individual shareholder, I believe, and I like dividends. The other officers here are large shareholders, have much of their net worth, and they like dividends too. Our staff, we implemented a buying program for them and got over 90% participation. We like dividends. We want to keep increasing dividends over time as our financial situation continues to improve because we believe it's the fairest way to reward long-term shareholders. And so now it's about 1%, a little over 1% of the value, and I think it's a great buying opportunity because you can clearly see the vision ahead This year is going to be a very strong year, but 2024 is going to be even better as everything gets set up. So with that, let me turn it over to you all for questions.
spk10: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, you may also press star 1-1 again, and this will withdraw the question. Please stand by while we compile our list. And to note, ladies and gentlemen, due to time constraints, we please ask that you limit yourself to one question and one follow-up. Again, we ask that you please limit yourself to one question and a follow-up until all have had a chance to ask a question, after which we would welcome additional questions from you. Our first question is from Scott Handels of RBC Capital Markets.
spk02: Yeah, hello. Can you hear me?
spk10: I can. Please proceed.
spk02: Yep. Thanks. Hey, Joe. I appreciate some of the commentaries up front. The question I have is you talked about setting up for 2024, and it looks like you guys are going to have I think it's 62 drilled and uncompleted wells at the back half of this year, which I believe is a little bit in excess of what you normally carry. Can you give us a sense of how much of a tailwind does that provide you into 2024? Yes, sir.
spk03: Hey, Scott. This is Tom. Yeah, just to paint a little color on that, those 49 net wells that are going to be in progress at the end of the year, That's almost double the number of net wells that we had at the same period last year. So it's quite a big influence on the calendar year going forward. We're very excited about these wells, some of which are the wells that ADVANCE is drilling currently in Southern Ranger, Northern Antelope Ridge. So they should be very high oil cut and very low water cut. So we just can't wait to get these online.
spk02: Right. So in theory, that should help some of the capital efficiency, I guess, next year, right? Because I would assume you'd work that down to normal levels. Is that a fair way to look at it?
spk03: Yes, sir. Yes, sir.
spk02: Okay. And as my follow-up question, it's on the midstream. The other point that you touched base with, Joe, in that there's some capital spent to connect all those pieces. Can you give us a little bit of color on what the plan is to try to specifically accomplish with that capital? And is it possible to connect like San Mateo to Pronto? I know one's in a JV and one's obviously fully owned, but is there a way to integrate those two together and the benefits of doing that?
spk13: Hey, Scott, this is Brian Willey, who I serve as the CFO and also the president of Midstream here. It's good to hear from you. Thanks for the question. Yeah, so look, we're really excited about the opportunities at Pronto and connecting those systems. And to your question, yes, we do plan to connect the San Mateo system and the Pronto system. You're right that one is a JV and one is wholly owned. But we do plan to connect those two systems. And also on the Pronto side, we plan to go down and get the wells that are in the advanced area and also some other wells from Matador that are in Lee County. And so there's good opportunities for us there, both for Matador and for third party. And so we're really excited about the chance we have to be able to do that this year and to spend that capital. And, you know, we've made good investments in the past. I think as we build our ministry and business, I think it's always been a good investment for us. And we've had lots of opportunities with third parties and repeat customers. And we expect that same thing on the Pronto side, just as we have on the San Mateo side as we build both those businesses together. So we're looking forward to it. It'll be a great opportunity for us.
spk10: Thank you. We are now accepting a question from Neil Demon of Truist. Your line is now open.
spk01: Morning, all. Thanks for the time. Maybe just a little follow on Scott's on that future production specifically. Certainly not expecting a 24 guide, but I'm just hoping, you know, maybe you can give a little bit more color in your view of either this year's exit rate or maybe asked another way. I mean, it definitely seems like you could have some really strong, even maybe call it stronger than normal production growth through the end of the year into 24. I'm just wondering if you can give any sort of sense of that versus, you know, versus other years.
spk14: Well, the first thing I'd say is we're at a point in time, and especially this year, I'd be wary of looking at things just on a quarter basis, that you've got to look a little longer rather than limit it to an arbitrary deadline of this quarter or this year. But we'll play it. as the operations dictate exactly how we're going to do it. And so we're not trying to have a target for the fourth quarter of this year or the first quarter of next year, but whatever is operationally makes sense. Tom, you want to take that question again?
spk03: Sure. Neil, just to add a little bit of color, in our slide deck we have a slide that kind of shows our production growth By quarter, and as Joe mentioned, we don't want to emphasize every quarterly as opposed to the long-term kind of yearly rates, but you can see there in the fourth quarter, we get to about 143,000 BLE per day. Yeah, no, that makes sense.
spk01: Okay, I definitely like the ramp there. And then my second question is just on some of the fraction items you all spoke about in the press release. Specifically, I'm just wondering, is around that, Joe, you mentioned about the Rodney Robbins being around so long. So is that the reason, or should we think about that area as being the primary sort of typical area for shut-ins, or is this really just a typical part of overall operations going forward as you continue to have your development plan?
spk14: Yeah. Neil, one thing I want to make a point on the production side, it's affected a lot when you have these facilities in multiple wells. if the offset operator is undertaking fracking operations too because you've got to shut in your wells and sometimes that has bigger impact than weather and you don't control it either. You get a call saying we're going to frack and then you've got to make those adjustments. So, you know, that may delay or you may get a call and you accelerate something for that reason. So, That's one other adjustment I wanted to note that we've had to work around, and I think our staff has done a good job. Now, the second part of your question, do you mind repeating it to me? Because I was thinking of the first question as you were saying the second question.
spk11: Neil, are you still there? Gerald, did Neil drop off?
spk10: Unfortunately, I think he did. Would you like me to proceed to the next question?
spk04: Yeah, go. I would just say something, you know, to elaborate on that. This is Glenn Stetson, EVP of production. Just as Joe mentioned, in this case, we have 19 existing Rodney wells where the addition of the eight Rodney wells required us to shut in, you know, 17 of the existing producers. to be able to conduct the hydraulic fracturing operations on the new wells. And so it is just kind of a nature of this cube development as we come in and fully develop these assets that we go in and shut in the existing producers to protect them. And so, you know, similarly at state line, when we're going to complete these eight new wells at state line, there's a similar operation. And so we do forecast that and account for it. And so really, then it just comes down to the timing of it. And so we shut in. We started hydraulic fracturing operations on the eight new Rodney wells right at the beginning of the year. So we shut all those wells in and And as Tom mentioned, or Joe, that we're beginning flowback operations on those eight new wells, and so all the existing producers will come along with it. So it really is a timing thing. And the fact that these wells are so productive and have high working interest and high NRIs, so it does have an impact, but really just a timing thing.
spk14: The other thing is to note, that when you do this, it doesn't impair either the approved reserves of any individual wells when you shut them in or any effect on the future production. And so it's becoming more of a part of the operation than any long-term effects.
spk10: Thank you. Our next question comes from Leo Mariani of Roth. Your line is now open.
spk15: Hi, I wanted to dive a little bit more into the production guidance here for 2023. I understand that a lot of what you guys are doing is setting up for 2024, and it sounds like you're going to have some high growth to start the year next year. But if I just kind of, you know, look at some of the high-level math here, it looks like you added around 25,000 BOE per day from the advanced deals. I guess if I assume that closes sometime early in the second quarter of 23 per your guidance and kind of back out those volumes in 23 and just kind of look at what that leaves me, it looks to me like your base production in 23 is kind of flattish with 22 per your guidance, despite having kind of a couple more turn in lines, you know, on the base property. So I just wanted to kind of understand that a little bit more. If I look at last year, you guys added 70 net wells, you grew production 20%. And now it looks like outside of the advanced deal, you're adding a few more than 70 wells this year. But it looks like the base production is closer to the flattish of my back out advanced. So can you help me kind of understand that, you know, a little bit, I guess I would have thought it would have been a little better.
spk14: Well, Leo, I can understand that because you're not taking into account that when we're doing the advance bill, we're shifting some of our staff resources and rigs and other ways that we would have production. If we weren't doing the advance deal, it wouldn't be Flattish. You would have, you know, our staff be fully operated on find or drill in some of our inventory, which the quality of the rock in our inventory is outstanding. And we got over a decade worth of inventory. So when we've been on the road, we've gotten inventory questions and, uh, we have plenty and we could have, we would be addressing that instead of advance, uh, and connecting up the, the, uh, uh, the pipeline, our midstream system. So we write again, I think it's important. to look at the quality of rock that we're obtaining, and if we don't obtain it now, we'll never have a chance to add on, adjacent to our acreage, that kind of quality rock. So it would be like telling a football coach, hey, your running back only gained 50 yards this game, and you threw five touchdown passes. You know, if the passes weren't working, you would have used the running game more And we were in that situation. Fortunately, we got advanced, so we have a choice doing advanced or some of our own properties. Our properties are HBP. We're going to work in the advanced, particularly where they have ducts, because that will accelerate production coming off of that. And so looking at our asset base and our options, it made sense to focus more on advanced and bringing in less of our inventory. But if we didn't have advance, you'd see growth much better than the 3% that you're talking about. But you take out a couple of rigs, you put your focus on the new properties, and taking advantage of that opportunity to connect up your pipeline, we think that's a better program.
spk15: Okay, I appreciate that, Kohler. And then just around the midstream, obviously your midstream CapEx is up a fair bit this year in 23. You guys kind of explained what you're doing there, so that was helpful. But just as we look into, say, you know, next year, do you expect to have, you know, midstream expense still kind of be elevated on the capital, or do you think it kind of comes down a bit? Is a lot of this is more, I'll just call it, you know, near-term kind of one-time spending on the midstream?
spk13: Hey, Leo, this is Brian Willie again, and I'm president of stream here. And thanks for the question. I think that, you know, we haven't said a lot about 2024 and relates to capital expenditures there. So I don't know that we're prepared to go into a lot of detail about what that would look like. We're excited for 2023, but we will want to take advantage in 2024 if there are opportunities. And so, you know, as we go forward throughout the year, if there's third party opportunities or opportunities with Matador, that we'd want to continue to take advantage of those. We'll evaluate those as the year progresses and as we get closer to 2024.
spk14: I think it's a good answer, Brian. We are very opportunistic driven that we didn't know we were going to be buying pronto, but it was offered to us in April, I believe, and May. Of course, we did it. That was too good of a deal to turn down And it just fit in very well with the other assets. And so as we go into these next years, whether it's an acquisition of oil properties or midstream or a federal sale like BLM, the Bureau of Land Management, we're going to try to take advantage of it. And that's why we build up our financial statement to be able to take advantage of those opportunities. And... So we try not to do a five-year plan and stick to it originally, but go where the opportunity lies.
spk10: Thank you. Our next question comes from Gabe Dowd of Cohen. Your line is now open. Gabe Dowd of Cohen, your line is now open.
spk02: Thanks, sorry about that. Hey guys, thanks for the prepared remarks. Guys, I guess I was just curious with the 49 net wells exiting the year, if you kind of beat expectations on cycle times, what's the likelihood that some of these wells could even come on or be pulled forward by the end of this year?
spk03: Hey Gabe, this is Tom. You know, to Joe's point about trying to keep our options open, you know, I we do expect these wells to be kind of into 2024, but, you know, if the drilling guys go faster and the collisions guys go faster, I think there's always a chance that they could cycle them forward and bring them on a little bit sooner, but it's just too early to tell at this point in the year.
spk02: Got it. Got it. Okay, Tom, thanks for that. And then maybe just a question on LOE. It looks like 1Q kind of starting the year low and then it kind of increases on the back of advance. Could you maybe just talk a little bit about what's driving the increase on the LOE side as a result of advance and is there the potential for that to be worked lower over time?
spk04: Yeah. Hi, Gabe. This is Glenn Stetson, EVP of production. We did highlight a little bit of this in the slide deck, but ultimately the increase that we've seen is primarily that we're forecasting is primarily due to us drilling a number of wells in Lee County, specifically attributed them to the advanced acquisition as well. And so part of that is a function of the fact that San Mateo isn't servicing those properties but that is another reason why we're excited about Pronto coming in and hooking up to the advanced properties and a lot of the properties in our ranger asset area. And so we do think that as we go forward, that those are, that's certainly a metric that we can improve upon with the expanse of Pronto and, you know, folding in the advanced properties into Matador.
spk10: Thank you. Our next question comes from John Freeman of Raymond James. John, your line is now open.
spk08: Thank you. I just wanted to follow up on Leo's question on the midstream CapEx and obviously understand that 24 is a little ways off, but I think just to sort of maybe help us so that we can kind of, I guess, not be, you know, caught by surprise maybe when we're trying to set our model for 24 on midstream. Just if there's certain things that you feel like are still going to need to be done versus one-off projects that maybe you all may or may not pursue for various reasons, just trying to get a ballpark idea of the midstream spend. Is it a number that is meaningfully lower next year? Is it somewhere to 22? or I think just anything that would kind of help us kind of frame in our model just where we sit today when you all look at it. Again, I realize that 24 is a ways off, but it would certainly kind of help us have a better idea.
spk14: Well, John, this is Joe, and I'd say I'd like to help you out. I'll give Brian the opportunity to comment a little bit. Okay. But again, it's just hard to predict how much third-party business that we will get during that time, which will build out to them. It's also probably highly likely that we'll connect up our three systems so that there's only, as you can see on that map, not much distance between connect points between San Mateo and Pronto and and pronto in the advanced system. So that's more likely to be done. Can't see what would stop that. As far as third party, that's hard to know. Certainly easy to say we'd connect if they're right along our route. And, you know, again, depends on the terms. If the terms were such, we would build a longer long way but that doesn't happen very often I respect if you'll give us say another quarter or so we'll have more definition for you six six months or and again I invite all of you analysts to come here to Dallas and meet with us one time or another and we'll try to have everybody here and you can have unlimited time to ask your questions and we meet you, but it's a fair question you've asked and over in Lee County, there's a number of options that we might do. It's just hard to, I don't want to give you a number you'd understand, but there may be others that would hold us to that number and wouldn't understand that its plans are still in the formation stage.
spk13: That's good, Joe.
spk08: I appreciate how candid you're being.
spk13: And, John, this is Brian Willie, and I'll just add on a little bit that, just as a reminder, San Mateo is owned 5149. So when we have capital projects at San Mateo, which we have a number of great ones, including building out our water system and some other opportunities for third parties, we only pay 51% of those capital expenditures. However, over on Pronto, it's 100% owned, and so we pay 100% of those capital expenditures. And so that's just something that you're thinking through kind of into the future and otherwise that, you know, as we expand into Lee County, those capital expenditures on the midstream side are 100% Matadors and not 51% like they are in San Mateo.
spk08: I appreciate it, guys. And then just a follow-up question, as y'all are sort of baking in the 10% kind of cost inflation versus 4Q22 levels, obviously just given the kind of pullback we've had in commodity prices, rig count, frac counts, down from kind of the November levels, you know, we're starting to hear a lot more about service cost inflation, maybe losing some momentum, and just trying to get a sense of maybe As you all stand right now, kind of you look at the rigs you got, the front crews you're running, sort of the opportunity when these things are kind of getting repriced, kind of I guess how much maybe conservatism is built in to that number. Just any additional details to kind of leading edge service pricing would be helpful.
spk00: Yeah. Hi, John. This is Chris Calvert, EVP and co-COO. I think To speak to the 10% to 20% inflation, we do price things in a little bit conservatively. We would rather come to you guys and say that we beat these numbers versus a miss. And so while we think that might be a little conservative to where the market really has recently pulled back to, we still think that's a fairly good estimate for us. Now, to answer your question, we are happy with our rig fleets that we have with us, our frack crews that we have with us. it does feel like maybe there is a little bit of softening in the market. You know, you've had maybe some slowdowns in other basins, but really that brings competition to the Permian. We're in the best rock. We're in the best part of the Permian Basin. And so, you know, we do see that inflation, there are some upward pressures on certain components of our operations, but you're right, there has been a little bit of slowdown. And so, you know, kind of like Brian said, we will, you know, we will speak more to this as the year progresses, but One thing that I do always like to mention, you know, simulfrac, remote simulfrac, drilling wells faster, you know, this is the fifth anniversary of our MaxCom room being in service. None of those efficiencies are priced in to these numbers that we released last night. And so we do expect operationally to continue capital efficiencies going forward, whether that's increased use of simulfrac, dual fuel technologies, So that's really kind of the story to inflation of where we see it going in 2023.
spk14: John, I have one other personal footnote to put to it, is that as someone who started Matador, first Matador, $270,000, I'm very sensitive to every dollar spent on capital expense. And the only part of anybody's commentary on her quarters when they accused us of being capital inefficient that really hurt when you start with 270 000 every nickel and dime counts and we started this second matador at six million dollars and i know it's over 10 billion but we still watch our our money and and sharpen our pencils and and so i If there's any fault in the capital efficiency, blame me, but this staff really works hard to work with the vendors on the most economical way to do things and try to do things in a planned fashion that emphasizes, and as I mentioned earlier, the BLM was done with a view of improving our capital efficiency, and then we got knocked around for spending that kind of money, but now you've drilled holes We've built 78 wells or so. Nobody's saying that, and you've seen the results. So we hope there's a direct correlation between our reserves, which are now 350 million, 350 million barrels, and our gas is nearly at a trillion cubic feet, that we have been capital efficient. And So we're trying. I want you to know there's 100% effort to be capital efficient, and we're always open to suggestions if there's a better way to do it.
spk10: Thank you. We'll be accepting our last question from Tin Rezan of Key Bank Capital Markets. Your line is now open.
spk12: Good morning, folks. I'd like to start on... your plans to drill in on the northern part of your acreage this year it looks like about 42 percent of your net turn in lines are in ranger and arrowhead you know i think the stock price reaction today reflects concerns on overall efficiency and productivity so as you have a little less state line and a little more northern activity this year can you talk about your expectations in the north, and if you view those wells as more development or exploratory in nature.
spk03: Hey, this is Tom Nelson, our EVP of Reservoir Engineering. I'm going to start, and I'm going to pass it off to Ned here in a minute, but this is an area where we drilled the Rodney Robinson wells four or five years ago, and those wells in the third bone spring stand, and each of those three wells has now produced over a million barrels of oil. In this area where the Advanced Acreage and Southern Ranger and North Antelope Ridge is a place where we've been drilling quite a bit. So we're quite familiar with the area. So I wouldn't classify it as much exploration as more development. That being said, there are still some very exciting wells that I know Ned and his team are excited to try out at some point. But this is an area between Rodney Robinson as well, and we've drilled – first bone spring and Avalon and second bone spring sand and third bone spring sand and Wolf Camp AXY. And we've got some second bone carb and some third bone spring carb and some Wolf Camp Bs, you know, coming online here in the first quarter. So I think we're, you know, Ned and his team have done a marvelous job exploring for a lot of different targets here. But today we feel very comfortable with the productivity of these wells. They're known to have high oil cuts and not produce a lot of water, so we'll be working that LOE down. That being said, these wells, they don't have quite the flashy high pressures of some of the places down further south, but they have nice, steady decline rates that will provide good long-term value. With that, I'll pass it over to Ned.
spk05: Hey, Tim. This is Ned Frost, the VP of Geoscience. I think Tom did a really nice job of kind of framing that. I mean, we've said it before. We kind of joke that the advanced acreage is a nice acreage block between Mallon and Rodney Robinson. And this is really an area of the basin that we've been focused on for a long time. Very high quality well results. You know, again, tip our hat to Advance for developing a lot of quality benches on that asset and bringing a lot of value forward. We think that there's still a lot to do in this area that will be accretive to Matador and will generate, you know, long-term value for Matador shareholders. We're very optimistic on this area. And you'd also asked about Arrowhead. You know, Arrowhead we took a little bit of a break from. We're excited to get back there. And I think you will see our rigs kind of spread across all our asset areas this year. And I think in many ways, that's a testimony to the high quality projects that we're capable of bringing forward across our entire acreage footprint. So I think there's a great amount of stuff to get after this year. And as we always do, we're always looking for that next exploration target to go after. So I'd continue to watch this space, and I'm sure we'll have some more to bring forward in the future.
spk12: Thanks for the comprehensive answer. And as my follow-up, I'd like to add on a little bit to, I guess, John's question on cost inflation earlier. You put out that number, $1,125 per foot. Obviously, it's calendar year average, but is there some sort of implied reduction you believe over the course of the year? I know you recognize it's conservative, but you know, there's line of sight on steel prices softening and, you know, you could see rig count reductions, but just kind of curious how we could expect that to trend or what you've assumed for the year.
spk00: Yeah. Hi, Tim. This is Chris Calvert again. I think, you know, from an expectation standpoint, you know, obviously our goal operationally is to go out and beat our estimates. You know, we look to continuously improve upon operations, whether that's drilling wells faster or increasing simulfrac percentages things like that and so while it's you know it's difficult to say to give you some sort of guard rails on 2023 i guess you know we would just i simply look to past performance to where every year that we have gone out whether we started simulfrac in 2021 we've increased the number of wells that we've done that on in 2021 then in 2022 and so while it's hard to give you an estimate on on where we think we could beat You know, I think that we look to our past performance from an operating group and say that we always execute in an extremely high level. We continuously approve upon the areas that we know are our capital efficient areas, whether that's redesigning casing strings, you know, dual fuel usage, things like that. And so while it's hard to give you any sort of a guardrail, you know, I would look to just continuously approve on the statistics that we put forward last year, and that's things such as increasing simul fracture, That still do have a very nice dollar savings when we do those procedures.
spk12: Okay. Thanks for all the callers.
spk14: Good question. Thank you, Tim.
spk10: 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.
spk14: This is Joe, the founder and Chairman and CEO, and I'd first like to thank you for your interest in Matador and extend once again our invitation to come by and see us, and we'll have more extensive visits. The second thing I want to know is that we try to look longer term than just a quarter. I think we had a great quarter in the fourth quarter of 2022, but we're not trying to rest on our laurels but make plans. not just for the first quarter of this year to be good, but the whole year to be good, and to set it up in such a way that we'll get better and progress in value, but set it up again for 2024. We've seen that for some time, that that was really going to be a good year for us, but we also think the rest of 2023 will be very productive. So, you know, on cost inflation, I do think that we're getting a better handle on it, and I want to be conservative. I may be overly conservative on that and overly conservative on production, but if we weren't doing advance, we'd have a lot bigger growth than 3%, and I think you all entrust us with our history that we would be back more along the historic curve. And with the midstream, that's strategic. And again, when you have different units that have to be involved, it just takes a little more time and planning. But I think you're going to see companies with midstream have a real advantage because there is some capacity limits and you gotta get your water disposed of and uh... if you own it and control it you just have some advantages of getting your product to market or your salt water disposed and that's what we're trying to build something that has real long-term value and have what we say uh... proper growth at a measured pace and some of that relates to timing that uh... uh... you know, that you've got to wait for your neighbors to finish their fracking before you could come in and do it. And, you know, timing of the midstream or getting a rig in. And when you have the high class problem of all your, we have six teams and each of them have wells they want to drill in their sector. And so we've got to allocate capital and rigs to help them do that. That takes a little more planning. and a little more timing. So we've always tried to look, we look at the quarter, but we also look at the year, and then the year after to keep up this momentum. So if you want more detail, we invite you to come in and see us, and I think you'll see the plan makes sense when you get to see it all at once, and you get to meet the caliber of our staff, and I always like to emphasize the quality of our rock and the quality of our people is the best assurance of future success as MADDOR continues its growth to a $10 billion company. So with that, I'll sign off, but don't hesitate to call us.
spk11: We'll always return calls. Ladies and gentlemen, thank you for your participation today. This concludes today's program.
spk07: The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 1 1. The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 111.
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