Matador Resources Company

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. 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 will now turn the call over to Mr. Mack Schmitz, Senior Vice President, Investor Relations for Matador. Mr. Schmitz, you may proceed.

Thank you, Gigi, and 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, Mack. 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 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'll 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 as we were getting to know each other was very similar we can come from very similar backgrounds in culture we've laughed about that some and that I think you'll 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 is that if you're 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, I think you'll see, is the 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 a billion aid 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're 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 the 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 Hainesville 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 Greg Krug has guided us in this regard and we've grown our midstream capacity from zero 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 believe before the end of the year likely to be at full capacity or close to it. The team that has 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. 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 and our operations. And I've been very glad that Greg... suggested this and helped guide us along the way. In addition, in this regard, we 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 six times in four 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 in the base dividend and trying to make it be the right amount we believe it's most fair to all the shareholders We're 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've paid down debt, so our debt levels is now with a ratio of less than one. Okay. 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 is 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 compares to the sequential quarter. And we tend to look more at how is it over the course of the year. So how does one year compare 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 we do like 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.