Matador Resources Company (NYSE:MTDR) Q2 2019 Earnings Conference Call Transcript

Aug 01, 2019 • 10:00 am ET

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Matador Resources Company (NYSE:MTDR) Q2 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Our first question comes from Scott Hanold with RBC Capital Markets.

Analyst
Scott Michael Hanold

Hi guys.

Executive
David E. Lancaster

Hi Scott.

Executive
Joseph Wm. Foran

Hey Scott.

Analyst
Scott Michael Hanold

So I mean seeing capex, where it was this quarter was very, very good, well below expectations. And can you kind of give us some quantifications on some of the savings you're seeing and where we could ultimately -- maybe look through where you were at the end of '19, where we are today, but where could we be as we enter 2020. I don't know if there's a relative figure like dollar per foot completed or an average well cost of a typical lateral length. Or if you can give us some context of how that's progressed to today and where we can expect it to go in 2020?

Executive
David E. Lancaster

Yeah. Hey Scott, it's David. I think that we had put out in the investor deck this last quarter, so a slide that had talked to how we thought that 2019 could go in terms of our ability to improve our capital efficiency. And I think that we have said that kind of on a dollar per foot basis, as I recall, that we thought that would be down 13% or 14% over the course of this year. So far, I think we're probably a little bit ahead of that this year. And I think that, that had projected we'd be down another 10% to 12% again next year. Of course, that assumed that there wasn't any inflation in service costs, that those would remain flat because we were trying to give an idea of what our own capital efficiencies could be. So I think that we're probably running a little ahead of our expectations. And I give a lot of credit, of course, to the operations group for their abilities to do that. I think that's been accomplished, both on the drilling side and probably, in particular, on the stimulation side as well.

And so it's been a really good effort to this point in the year. I do think it's important to note that we sort of -- a lot of what we've done in the first half of the year hasn't been as much associated with the longer laterals, although it probably was in the Eagle Ford. But in the Delaware, we're just -- while we do some longer laterals that we're kind of just, I think, still in the beginning stages of that. So as we go through the second half of the year, we'll see that a little more. And then, of course, as we go into 2020, I think that will even pick up more. So I think we're pretty optimistic that as that transition happens, we'll continue to make progress in terms of dollars per foot.

Analyst
Scott Michael Hanold

Okay. Well, that's good to hear. I appreciate that. Shifting to the Midstream for my follow-up question. On San Mateo, it looks like you all elected to spend a little bit more to accommodate growing third-party potential