Matador Resources Co Q4 FY2025 earnings call

Joe Foran emphasized the quality inventory in Delaware with over 40 years of experience. Mentioned strong balance sheet, increased production, reduced debt, and strong cash flow. Highlighted growth optionality with San Mateo and working with Energy Transfer. Chris Calvert discussed value creation focusing on profitability, 11% reduction in CapEx for 2026, and improvements in well costs and EURs. Glenn Stetson mentioned using produced water for hydraulic fracturing, with 72% of water in 2025 being produced water to reduce CapEx and lease operating expenses.

In the Delaware Basin, Matador has over 200,000 acres. They increased production, reserves by 9% as measured by Netherlands and Sul. Highlighted strong performance in Avalon with a well in Southern Ranger area close to 400,000 BOE with high oil cuts. Also noted 6% increase in average lateral length in inventory from 2024 to 2025, including 3.4 mile laterals on Ameritiv acreage.

2026 plan targets free cash flow over production growth, 3% oil growth with 11% reduced capital spend. Forecasted $130 million in CapEx savings for 2026. No uplift baked into 2026 production guidance from surfactants yet, but excited about early results. Excited about Woodford play as additive to current inventory, with plans to drill a pilot well and learn about the zone.

Factors such as economic climate, political situations (e.g., war prospects, Europe issues), oil price fluctuations. Complex, multifaceted nature of operations involving various government agencies and vendor relationships.

Q: Noah Hungness asked about net undrilled lateral footage increase and inventory adds in certain formations.

A: Tom Elsener responded on strong production in Avalon, 6% increase in average lateral length, and successful zones like third Bone Spring Carbonate and Wolfcamp D.

Q: Neal Dingmann asked about 2026 plan focusing on free cash flow.

A: Joseph Foran and Chris Calvert discussed value creation through profitability focus, 11% CapEx reduction, and optimization of levers like revenue from San Mateo and well cost improvements.

Q: Tim Rezvan asked about midstream value realization.

A: Joseph Foran and Christopher Calvert discussed holistic approach, working with partners like Five Point, and long-standing relationships with vendors.

Q: Zach Parham asked about share buyback.

A: Rob Macalik said they consider stock undervalued and use share buyback opportunistically.

Q: Derek Whitfield asked about surfactants.

A: Christopher Calvert said no uplift in 2026 production guidance yet, but excited about pilot test results.

Q: John Abbott asked about Woodford strategy.

A: Christopher Calvert and W. Elsener discussed it being additive, drilling pilot well to learn.

Q: Scott Hanold asked about M&A.

A: Van Singleton and Bryan Erman discussed brick-by-brick approach and looking for good opportunities.

Q: Paul Diamond asked about D&C in 2026.

A: Christopher Calvert said it's efficiency driven with longer laterals and completion efficiency improvements.

Q: Philip Jungwirth asked about better wells for less money.

A: Tom Elsener and Joseph Foran discussed improvement in well productivity, cost per foot, and debt reduction from cash flow.