Good morning, ladies and gentlemen. Welcome to the Matador Resources Company update call. My name is Victor. I'll be serving as the operator for today. At this time, all participants are in listen-only mode. We will facilitate a question-and-answer session at the end of the company remarks. As a reminder, this conference is being recorded for replay purposes. The replay will be available on the company's website for one year, as discussed in the company's press release issued today. I will now turn the call over to Mr. Mac Schmitz, Vice President, Investor Relations for Matador. Mr. Schmitz, you may proceed. Thank you, Victor. Good morning, everyone, and thank you for joining us for Matador's update call this morning. 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. In addition to the press release earlier this morning, I would like to remind everyone that you can find a short slide presentation in connection with our announcement this morning under the Investor Relations tab on our website. With that, I would now like to turn the call over to Mr. Joseph Foran, our Founder, Chairman, and CEO. Joseph? Thank you, Mac, and welcome everybody to this call. Please feel free to ask questions that you want to ask, and I would just say three things. One is on those slides that Mac referred to is a map that shows our acreage position and then what we're acquiring from Advance, and you can see how it fits together and how it's conducive to work with Pronto, our new midstream acquisition. Second, as we will be talking, please note the quality of the acreage and its productivity. Also, we wish to express our appreciation to the Ameredev operating group that's been operating these properties and the quality job that they have done and their cooperation with us as we studied these properties and visited the well sites. As well as to our friends at EnCap, and how much, how productive our times with them were, and that has led this to, we think, a win-win deal. With that, Mac, open the floor to questions, please. Go ahead, Victor. Thank you. To ask a question at this time, please press star one one Ladies and gentlemen, due to time constraints, we ask that you please 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 any additional questions from you. one moment for our first question. Our first question comes from the line of Gabe Daoud from Cowen. Your line is open. Thanks, Victor. Hey, good morning, Joe and everybody. Congrats on the deal. Joe, maybe can we just start philosophically? Obviously, this is one of the biggest acquisitions. If not, actually, it is the biggest acquisition you guys have made in Matador's history. Can you just talk about, on a go-forward basis, how should we think about, you know, the balance between free cash generation and now maybe Matador remaining, you know, more aggressive on an M&A standpoint? Just kinda curious to hear your thoughts on how, you know, we should be thinking about that moving forward. Well, thanks, Gabe. Well, first, I begin what we've always tried to be on our acquisitions is selective. We wanted to make sure that there was quality properties, in good producing areas, had upside, you know, fit in with our midstream, and that the way, the properties were drilled and completed were similar to our philosophy or consistent with our philosophy, and that the, teams doing it, Ameredev, would do it in a professional manner again, consistent with the way our, operations and completion people would have done it. This hit all those boxes, as well as the additional box on the, midstream. You know, we're very excited. As you look on the map, you can see it's fits very, very well, very, very good rock. Tom, you know, the head of our drilling programs and the teams, various teams we have in New Mexico is excited. Everybody else too, our drilling crews, everybody's liked that. As I turned it over to Tom, when we posed it to him, "Did you wanna pursue this deal or not?" Tom, your response was? Well, absolutely, Joe. We, you know, our team has been very excited for, you know, to purchase more properties in this part of the Delaware Basin. It's an area that we know very well. We've been drilling in this area for some time, and it's right in between our Ranger and our Antelope Ridge properties in the Northern Delaware Basin in Lea County, one of the best basins in the Delaware, one of the best counties in the Delaware Basin. Our operational teams have done a really nice job executing in this area for a long time. Ned and geoscience team have been looking at this area with a lot of excitement for a long time. Yes, sir, we're very... been very excited to purchase these properties. Thank you. One moment for our next question. Well, did that answer your question, Gabe? Our next question will come from the line of Neal Dingman from Truist. Your line is open. Morning, guys. Joe, thanks for the time, and congrats. I like the deal. Joe, my question's on the sort of just a follow-up a little bit on what you were just going over on the operational plans. You all continue to do a tremendous job of, you know, we heard a lot of details in the last quarter or two about others having to turn towards more multi-stack development. You guys have been doing that now for years. I think when I've been with the guys, you know, you guys talk up about up to 15 zones that you're able to produce out of. Could you just talk maybe in any sort of color you're able to give on these? Is there same potential? Again, I'm assuming there is, given where what you just mentioned, what the guys are mentioning what's up there, but I'm just wondering how you plan to attack this. Neal. Neal, I'm just gonna ask Ned. Yeah to talk first, and if any follow-up is needed, Tom or, you know, one of the team leads, Billy, can follow up. Hey, good morning, Neal. This is Ned Frost. I'm the SVP- Ned of geoscience here at Matador. Look, I mean, this is a great acreage area. We've been very excited about this for a long time. Internally, we kinda often phrase it as it's a nice acreage block between our Marlan and Rodney Robinson asset areas, so it's in between very good producers. You know, you kinda called out how many zones we produce from. You know, we've been very methodical about trying to increase the number of zones that we can produce from. I think a good amount of credit should go to Advance, Peter Lellis and his group, and then subsequently, Ameredev with Parker Reese. Both teams have done a very good job of methodically developing this asset. Really what we're seeing is this area of the Delaware really has a lot of those zones that we like to target. You know, First Bone Spring, Second Bone Spring, Second Bone Spring Carbonate, Third Bone Spring Carbonate, Third Sand, you know, Wolfcamp A, Wolfcamp B. These are all here, and they're all really nice. I mean, it's a very exciting area to get to work on. You know, a lot of the locations that we have here are spread across those zones. Then we're also seeing a fair amount of potential in the Avalon, the Wolfcamp B, and potentially the Delaware Mountain Group here. I think there's still a lot to do in this acreage block. Again, the previous operators have done a really good job of developing this. If I could just ask one more follow-up. Is there something else you want to add to that, Joe? Yes. Billy, our President. Hey, Neal. This is Billy Goodwin. Of operations. Hey, Billy. President of Operations, Billy's been waving his hand like "Put me in, coach. I just wanted to follow on there a little bit. You know, I grew up in the oil field and worked around the world, but found my way out here to this particular area of the Delaware Basin in 1989, and it's my favorite. So I'm really happy about this deal and, you know, all the A-plus rock and, you know, mixed with our A-plus people, it's gonna be great for all of us. It's a great deal. You know, talked to Tom and Ned and talked about, you know, the way they've developed it and the spacing and all, and all the different pay zones that they were both just talking about. This is a wonderful deal. On top of that, the openness that, you know, with Ameredev, you know, discussing operations and their development plans and all, just this has been a big win all around and looking forward to getting after this. Great. Great to add, Billy. You know, just one last one, Joe. On slide four, I really like showing all that midstream synergies. Is there a way to, you know, almost, I don't know if you can quantify what type of value you ascribe from that? Obviously, it fits well with the Pronto, with what you already have. Maybe if any of your guys could give a little more just color on the midstream side. I really like the addition of that too. Yeah. This is Gregg Krug, EVP of Marketing and Midstream Strategy. We're really excited about this. We think that there is definitely some upside associated with this, tying this system, this production up into our Pronto system. I mean, that was one of the drivers behind acquiring Pronto, was for this kind of a situation, to be able to tie into additional acreage. We definitely think there's a potential upside here. We're excited to get started on it. Yeah. This is. Thank you all. Brian Willey, the president of midstream. Maybe I'll just- Add a few things. Greg said it well. Sure, sure. I'll also add that, you know, the project position has been really good for us already as we've gone out and had opportunity to get some of Matador's gas, and this will just improve that as we're able to go down. Some of this acreage is undedicated, so we look forward to going down and providing some, you know, flow assurance there, and it'll be great. I think as we go down as well, we've identified a number of third parties that could be potential opportunities for us as well. We look at this and think there are a lot of midstream synergies, and a lot of value here that is waiting to be captured. Fantastic add. Thanks, guys. All right. Just one other point I'd like to make is if you remember when we bought the BLM leases and we were bringing them on, you know, we wanted the market to know they were coming, and we made some what, for the time, was pretty bold statements that we'll have this system, pipeline system complete by such and such date. We'll bring on the Rodney Robinson wells. On this date, we'll bring on the Stebbins, you know, and so on. We did it. You know, we did what we said we were gonna do. It would've been much more difficult or problematic if we were dedicated to somebody else who may or may not get your wells completed and on pipe by designated time. It really showed us part of the value if we're a public company and we're asked, "Well, when are those wells coming online?" Be able to have some control over the laying of the pipeline. I'm real proud of the team for fulfilling that pledge back on the BLM leases a few years ago and continuing that trend of where we have undedicated acreage to get there with the pipe, so we can bring production on at a designated time and generally sooner than expected. If I might pile on, Neal, this is Glenn Stetson, EVP of Production. On the water side too, You know, it's nice to see that Advance kinda had that same mentality in terms of controlling your own destiny. You pointed to the slide, but they built out a nice infill gathering system that includes infrastructure with the Devonian SWD and infrastructure for being able to use produced water for their fracturing operations. It was once again another thing that was synergistic in the way that they approached developing this asset is building out their own midstream infrastructure. A final point of piling on is that these are fairly recent leases, so you don't have the problem of a vertical wellbore that may not be fully compliant with today's environmental regulations. This is much further along. I think Ameredev and Advance were both cognizant of the need to do it right. Taking over, we don't have a lot of remedial work that we need to do for the environment or putting it on pipeline, which keeps the trucks off the road and is the way to proceed. You know, that wood was already chopped largely. You know, we do have, you know, further work to do on completions and drilling and, you know, to realize the full value, but at least it was off to a good start. Thank you. One moment for our next question. We have a follow-up from Gabe Daoud from Cowen. Your line is open. Thanks. Hey, sorry about that, guys. Your answer was so good, it just left me speechless, I guess. Just, a follow-up- Did you repeat that, Gabe? The answer was so good, Joe, you left me speechless, and I got disconnected because of it, I guess. Never mind. That's gonna be reported for a year. I'll just be quick and just squeeze in one follow-up. Could you just whether, on the asset or just Matador as a combined company, can you just talk to the exit rate for this year on the production standpoint? Yeah. Hey, Gabe, this is Michael Frenzel, EVP and Treasurer. I think, for in terms of our 2023 numbers, we're gonna defer that discussion to our February earnings call. I think we'd like to focus on the asset and work on how these assets are gonna work together as we continue to develop our plans for 2023. Okay. Got it. All right. Thanks, guys. Thanks, Gabe. And our next question will come from the line of Jacob Roberts from Tudor, Pickering, Holt & Co. Your line is open. Morning, guys. Hey, Jacob. Morning. Morning. I'm just curious, kind of following up on Neal's question, if you guys could maybe quantify or provide a breakdown by zone of the added targets, please. Jake, this is Tom Elsener, EVP of Reservoir Engineering. You know, this is an area of the Northern Delaware Basin that has been, you know, very well developed in the Bone Spring targets, predominantly, but also in the Wolfcamp A and B, as Ned mentioned. We do have a wide variety of targets across You know, all the way from the Avalon all the way down to the Wolfcamp B, and then we think there's upside potential in the Wolfcamp D. That's a nice target of source rock that has been developed all across the basin, and we view that as kind of additional potential. We do think that these wells have very long lateral lengths. I think our average operated lateral length is expected to be close to 9,400 feet, and there may be some opportunities as that acreage bolts on to some of our preexisting properties to lengthen out some of those laterals. I think we're really excited about all the different targets in this, in this area. I think we're very bullish on all these different zones. Okay. That's helpful. My second question would be just doing some mapping this morning, it looks pretty firmly in the Potash region of New Mexico. I'm curious if you expect any development issues related to the mining or surface owners in the region. Maybe a subsequent to that would be, it looks like the western portion sits atop federal land. If you could provide some color on any permitting that might need to be done there. Sure, Jake. you know, we feel pretty good about our situation here. About 75% of the acreage is not federal. You are right that some of it is in the Potash area, but it's an area that already has 99% of the acreage is already HBP, and it's already got wells and pads and pipelines all set up for it. Again, going back to the commentary about the advanced work they've done, they've done a nice job on these assets and getting drilling islands ready to go and they've done some good development on it already. I think we feel pretty good about our situation there. Great. Appreciate the time. Thanks. Thank you. One moment for our next question. Our next question comes from the line of Leo Mariani from MKM Partners. Your line is open. Hi, everyone. I was hoping you could provide maybe a little bit more information on just the background of this deal, in terms of how it came together. Was this a competitive process, in terms of like an auction? Was this more negotiated? Obviously, you're taking some debt on, you know, as well. Maybe just talk about your plans there, in terms of I'm assuming you're gonna try to get some of this revolver debt paid off, you know, in the next several quarters. Just wondering you to hit on those things. Well, I'll take first stab at it and then follow up with one or more of the group here. First thing is that really the way it came about is that this is a property that people knew was somewhat available, and there was some sort of process I don't know the details on. They were dissatisfied, I guess, with the results. Gary Petersen, who is a longtime friend of mine, called me, and he said thought we were the logical candidate. We generally have not engaged in highly competitive sales, preferring to build it up as we've expressed to people brick by brick, except I knew and trusted Gary, and EnCap has a good reputation. Ameredev has a good reputation. Looking at it, we decided to engage and begin the study. We saw as we studied it was a better and better fit for us, it progressed from there. You know, that, they're very experienced at this, and so we felt like we were experienced, so we went through the different issues, but it was constructive as both of us were working around the issues, trying to find ways that, to help protect each other. I think when we got to the end, Van may come on and give some comment. He negotiated primarily, and I thought he did a great job in keeping it very businesslike and building their trust and our trust in them. Gary and I were excited to work together, and it just kinda hung in there. Bryan Erman and the legal team with Craig did a great job working through all the issues. As you can see in the filing, it's a very long contract, lot of detail, everybody went at it in a professional way. It was a big deal. It's the biggest deal that Matador has done, billion six. There was great effort made to do it right. We hope, talk to us in one year or two, we can confirm it was done right or right, we believe we have a lot of confidence in it. It was a total team effort on this side that everybody pitched in and did their part as the other side did. It would be a good case study about how a buyer and a seller finally come to rest on terms that both feel were a fair deal. I liked it, and I appreciated Gary's confidence in us. We appreciate the work that Kyle and Jason did too from EnCap to get us to that point. That's how the deal came together. I don't know what else you might wanna know, but we're open to any question that you want. Joe, this is Glenn. That was helpful. J ust a bit, really emphasizing the hat tip to, you know, obviously we're real happy with how our team performed. Kyle Kafka and Jason DeLorenzo and Parker Reese were really instrumental on the other side. Joe's right, you know, it's a complicated agreement. There are lots of moving parts. They were all very professional and did their jobs well. We really appreciate them working with us and hope that, you know, this is gonna be a great long-standing relationship. I do think. Comment we were the logical candidate, given our properties and what we were doing and the way we were doing it, similar, consistent way that they were. That was a natural thing, and it was just aided by the fact that Gary and I knew each other and had a level of trust to get everything off to a good start. That's helpful for sure. Can you guys also just touch base on the financing? Is there more of an urgency to get a lot of this newfound revolver debt, you know, paid off as we head into 2024? Can you maybe just kinda talk about that? Yes. That's a good question. Yes, we will do it, like we did our debt last year, where we were paying it down regularly. Michael has made a slide for us, we'll get it out, at least by the February meeting when our board meets on this. It just shows the pay down will occur. At the end of this year, we project we will essentially be back to where we were a year ago, with the level of debt as we were before. Very important to remember that even from the outset of this deal, from the moment we close, we will still have a leverage ratio of less than one. That's what we worked to last year to get to. We'll get under that at the time of close. We'll never be over one during the year. There'll be a steady pay down, month to month, and use our cash flow for that. We will be ready to do other deals if they come up. If we're keeping our eye on the ball of keeping that leverage ratio at one, the best we can, at one or under, and keeping a strong balance sheet, because that's what made this deal possible. That's very helpful, guys. Yeah, this is Bryan. I'd just like to add on one thing, which is, you know, Joe mentioned the cash flow, and we still highly prioritize returning value to shareholders. We look forward to paying the dividend. You know, that we announced last quarter that we would pay a 15-cent dividend, you know, in March, and we look forward to that and continuing that throughout the year. The board, you know, later on in the year, as we kinda integrate these assets, considering whether to increase that or not. We continue to pay down debt. We'll plan on that, but we'll also continue to return value to shareholders through dividends. Yeah. To emphasize what Brian is saying, last year, we had three things we wanted to do. We wanted to increase the value of our assets and the value of the production, we wanted to reduce debt, and we wanted to give our shareholders a bigger return and get our leverage ratio under one. Our teams accomplished all of that. We want to continue along that line and assure our shareholders that it's our hope and plan to manage our assets in a way that we can continue to grow the dividend for them. We think the fixed rate dividend is the fairest of all. We want to keep our leverage ratio down. Finally, you know, we also wanna be adding value on our assets, and we think we're in the right areas to do that. You know, when you think Matador started out years ago with $270,000, first Matador sold for $388 million, then we started this Matador at $6 million. Today, you know, we've been up there at $7 billion or $8 billion. This should add to that. It's gonna be... Tom can tell you, we'll be adding close to $3 billion in assets here, and to go with what we already have. But we're not taking it lightly. Everybody here has been through times where the market was on virtual collapse, we're proud to be where we are, but we're not taking it for granted either. Everybody wants to keep the positive results going ahead and everybody's working as a team. All right. That's a lot of helpful color there, guys. Just last one for me here. Just wanna get a sense on the advanced production. I know you guys just sit around 25,000 BOEs per day in the first quarter, then you've got significant DUCs, like 20 DUCs coming on the back half of the year. Just given the size of the production base, I would assume that's gonna be enough to, you know, have a nice growth trajectory to the advanced production. Am I generally thinking about that right here? Leo, this is Tom. You know, you're right that we do have a nice set of DUCs here that we're, you know, really excited about. These are two-and-a-quarter mile long laterals, and we're very proud to get those going. I do think it's to Michael's point, I think we've got a little more time in front of us before we're ready to talk about our 2023 numbers. Those DUCs should be, you know, should play a role in the back half of the year. Thanks, guys. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Tim Rezvan from KeyBanc Capital. Your line is open. Good morning, folks, and congratulations on the deal. I was hoping to follow up on Leo's question. You know, I thought it was interesting you made an all-cash deal. In the past, you know, you've used your equity to do this. I was curious, do you believe that you needed to go all cash to win the bid? Was this more of just sort of a, you know, something you've been working towards with the leverage reduction, or is it kind of a combination of both? You know, I guess, what made you not issue equity and structure it like you did? I think that we could do the all cash. We had the strength of the balance sheet. We have a lot of cash on the balance sheet that was growing. We had under our existing RBL we had room on our borrowing base. Our borrowing base is up there at $2.3 billion. We only have an elected commitment, somewhat less than that. We may increase that. We can handle it all cash, and it wasn't a deal to beat out competition or anything. We just thought that was the most efficient way to do the deal that afterwards left us with the most flexibility. We didn't want to issue stock because we believe our stock is headed up in the right direction. In that regard, that's a feeling shared by the entire as we adopted a program where the staff could buy up to $25,000 in Matador stock, and over 90% of the staff is participating in that opportunity. You know, the rest of us, we're big shareholders, as you know that our management group owns a lot of the stock. We're, you know, we like the stock, we like the dividends that we're. Doing an all-cash deal and staying below one seemed to be the most elegant way to acquire this property in the cleanest and easiest way. Brian, would you add to that any or? No, I think you said it very well, Joe. I think on the cash side, it's great to be able to have this balance sheet where we can do a deal like this and have the strength of the balance sheet. It is something that, you know, the last year we've... couple of years, we've certainly been working on and paying down debt, and it's... We've talked about always being opportunistic and looking for the right deal, it was great to be able to find this deal and have it be the right deal with the great assets and opportunities that are available. You know, I don't think we were forced to do an all-cash transaction, but it certainly, you know, it was great to have the balance sheet to be able to do so and continue to move forward with our plans for 23. Okay. I appreciate that, the color. Then if I could just add one follow-up. You know, looking at the map, you have some acreage in Ward County that you picked up, you know, farther south than anywhere you've drilled there. How do you view that acreage? Is that a possible sale candidate? You know, is it HBP? Is it anything you need to do there? How does that sort of fit into the, you know, everything else? Tim, this is Tom Elsener again. We, you know, we're excited about that asset as well. The bulk of the transaction is, you know, in, on the New Mexico side, you know, that is something that we're, that we're excited about. That area, you know, it's gonna be a little bit gassier and a little more focused on the Wolfcamp targets. I know Ned and his team are very excited about that property as well. Okay. I guess we'll stay tuned on that. If I could just take one last one. Well, let me add one thing to that. There isn't that much distance. It's about 15 miles from our other properties there and out there. You're really a stone's throw for West Texas to be close to our Wolf and Jackson Trust property. We're looking at them and we're familiar with the area. You know, Glenn is intrigued, and they'll get plenty of attention. Yeah. Tim, this is Glenn Stetson, EVP Production. Just to kind of reiterate what Tom had said, it's roughly 10% of the net production is in there in West Texas. Same on the reserves front and the operated well count. It was just a smaller portion of the overall deal and the way we viewed it today. Just as Joe said, it really logistically and how we'll handle operations there, it'll fit in nicely with our West Texas team, and we'll be able to handle that just without any issue. Yeah. We feel our West Texas team is one of the best teams, and they'll give it plenty of scrutiny. You know, as a public company, we try to play a straight game. If someone were to come in and make an offer, we'd be open to it on those assets or any of our assets 'cause we wanna be transparent and play a straight game. They're gonna get studied. It's a good team. West Texas team has got good ideas, and Tom, I know, give 'em a look. When you have 90% elsewhere right in our main area of activity, that's gonna get first look. Okay. Okay, that's helpful context. If I could just sneak one last one in. Just looking at the midstream, I know Neil had asked about this. Did you have line of sight on this acquisition when you bought Pronto, or is this just sort of a happy coincidence? I would say it's more of a happy coincidence. Although, you know, we looked over the area, but again, that Pronto acquisition was also similar to this in the sense that we had a strong balance sheet. The company came to us and said, "Look, we think you're the logical buyer. We need to sell this to fulfill their other objectives, but you gotta be able to close in 30 days." Our guys got busy, and they stayed up all night, by the way, our guys worked all night along with the other side, EnCap and Ameredev. We were all up doing this, and we did the same thing on Pronto. We moved and got it done in 30 days, and thought we were in a good position, given our Delaware, Northern Delaware activity. We really couldn't specify here and here. We bought it, and it was almost kinda you buy it and they will come. Our business development guys got out and started trying to find some business, and it's working out. It's not finished, but we think we're making progress. Again, that's the advantage. We hit a new inflection point last year when we reached over 100,000 barrels of oil or gas equivalent. With that kinda cash flow, we paid down our bonds, and we paid down our bank debt. Our bank debt was all paid off. It put us in a different, you know, place to, for our strategy decisions. It's kinda working out, and we don't wanna deviate from that. That's why it was important for us to figure out how to do this and keep our leverage ratio less than 1. Okay. Thanks for all the comments. Thank you. One moment for our next question. Our next question will come from the line of Kevin MacCurdy from Pickering Energy Partners. Your line is open. Hey, good morning, guys. I know you haven't put out 2023 guidance yet, just curious if this incremental inventory changes how you kind of view your growth trajectory in the long term. You know, Kevin, I, you know, I think going back to an old saying from Mark Hereford of, you know, profitable growth at a measured pace is, you know, I don't know that anything about this changes that mantra. I would say that we wanna just continue to add long-term value, you know, either through the drill bit or through purchasing properties where we really like the rock quality and it fits our standards, or, you know, creating value through midstream or any other way, I think. I don't think that this necessarily changes any of our, you know, kind of our philosophies. Great. I know you kinda touched on the leverage in the balance sheet a few times on this call, just to kinda clarify, it sounds like, I mean, is one times net debt to EBITDA kind of the limit of where you would, you know, where you would see yourself stable for long term? Is it you'd be willing to get up to that level and then you wanna get your leverage back down to close to zero times like it is now? Well, I'd answer the question in this way, is we don't have a limit. We don't think in those terms. We think more in terms of opportunities, and we try to be select in those opportunities. Part of the selection now is to be careful where we are. Given the volatility in the market and the economy, that's all the more reason to be careful about your balance sheet. We, again, don't wanna take any unnecessary risk. Original shareholder in this, Matador, is in it much less, and we don't wanna endanger any of those gains. We wanna enhance them with a, with a better dividend from time to time and from adding to our property base and our inventory. That's where we're trying to go. If the deal is good enough, I'd go over the 1x leverage. On the other hand, if it's not, as Tom said, it's not gonna be growth for growth's sake, it's gonna be profitable growth at a measured pace. That's what we kinda follow. We think it's clear we're at a different inflection point than we were five or 10 years ago. So we can be more selective because our inventory is growing steadily year by year, and our financial strength, our production assets, including the midstream, gives us further enhancement. So we feel we have a good thing going, and we wanna keep it going. Being long, all of us being shareholders, we make more from our shares, most of us, than our shares appreciating than we do necessarily from salaries. That's a big driver. Everybody here. Our owners, in particular, everybody in this room today. I think you're gonna see us. I don't wanna ever say never, kinda like the football game. Third and one, I'm not likely to pass, but I don't wanna ever say I won't pass, and play the odds a little different. For now, we think this is a purchase that met all of our criteria and fit in well with our existing assets and operating philosophy. It was some that we felt was a really win-win deal, win for them and win for us. Thanks for the answer, Joe, congratulations to the team on getting the deal done. Well, thank you, Kevin. Come see us. Will do. Thank you. One moment for our next question. Our next question will come on the line of Subash Chandra from Benchmark Company. Your line is open. Yeah. Hi. Thanks. Congrats as well. Was curious what you would think of this, you know, really, really dumb math here, but, if you were blessed in any way that if you're say, you know, at 100,000 BOE a day and running seven rigs, and let's say you're tracking towards 25%-30% production growth, should we gross up the rig count proportionately to balance the business? Well, Subash, the first thing is, you know, when we're planning, making our plans for any given year, we look at a lot of different factors, and that's one of them. What's the right rig count? You know, the whole year, half year, you know, there's a lot of thought given to that with the inventory. Even more important is sometimes we haven't had to increase the rig count because our drilling guys have done such a good job in cutting the number of days on wells. They've got these state-of-the-art rigs that drill the wells faster, and every time you cut a day, you save a lot of money, maybe as much as $100,000 a day. You know, Chris and his team and Josh and his team in the drilling group, have done, I think, an exceptional job under Billy's direction to cut days and come up with all these innovations on cutting days on well. That's allowed each rig to be that much more productive. Billy, will you help me here? Yes, sir. Yes, we, you know, we enjoy our guys out there we're working with, you know, our partners that we got longstanding relationships, and, you know, we work with them to stay on top of technology and new ideas and procedures and work together and, just keep getting better as we go. We see, you know, we like what we see here at EnCap and Ameredev and what they've done, and we see more opportunities so. The other thing is, Patterson's done a very good job in keeping us at state-of-the-art rigs, and this rig that Ameredev was using from HP was a good rig. HP's a great operator, and so they are cutting down the days, and they're being more productive. Since some of these are already pads are made or you have DUCs that, you know, that saves time too. Having our facilities in place saves time. I don't know whether we'll need to add another rig to get done what needs to be done, but we could or may do it in the last part of the year, last half of the year somehow. Once we're fully taking over the properties. Billy, does that sound right to you? Yes, sir. They, you know, they've got H&P out there working. They're doing a great job. They're doing pad drilling longer laterals, and, you know, we're in communication with them. Patterson has been great with us to customize the rigs and move out to the Delaware Basin and have these high-tech rig with Managed Pressure Drilling capabilities. We're some of the first out there doing this, using these techniques, and it's been great for us. Chris, you got some more to add? Hi, this is Christopher Calvert, Senior Vice President of Operations and Co-Chief Operating Officer. I think the one thing I would add to that is this entire process working with the Ameredev team and Parker Reese, you know, the confidence that was built working with these folks over there and understanding how they drill these wells. The synergies that they have, the similarities that they have drilling these wells in the same way that Matador typically would, longer laterals, multi-well pads, they really do line up nicely to Matador's processes and procedures. You know, we talk a lot about simul-frac here, remote simul-frac. Kinda to what Joe said, you know, focusing on spending less days drilling these wells, also spending less days completing these wells. Really the process of which Ameredev has kinda developed for this acreage really does line up nicely with how Matador operates as well. You know, that's going to be the focus of how, you know, we continue to work with Ameredev during this transition, and then how Matador will continue to operate going forward into 2023, taking the capital efficiencies that we have learned through 2021, 2022, and really just applying them looking forward. Subash, does that help? That is, yeah. Great answers. Thank you. Just as a follow-up, this is probably not, you know, quite a big issue anymore, but just curious how many permits Ameredev brings with them. Subash, this is Tom Olsener. I think we're in pretty good shape for 2023. I believe they've got all the permits we need to execute a pretty wide range of plans that we may so choose going forward. Okay, great. Thanks. Congrats, everybody. Thanks, Subash. Thank you. Good to talk to you. Thank you. One moment for our last question. Our last question will come from the line of Douglas Leggate from Bank of America. Your line is open. Good morning, guys, and congratulations on the transaction. Morning, Greg. You mentioned in the press release that you expected to increase your elected commitments on the revolver, as part of the transaction. Can you tell us where that stands, how you're what are you ideally targeting? If you happen to have it, where you think your debt balance will be on the revolver when the transaction closes? It's hard to say. I'm gonna let Bryan handle that question. In general terms is we had an elected commitment of $700 million, roughly. We had $2.3 billion on our borrowing base. Then you're gonna be adding, so you're gonna be almost doubling that borrowing base with these new assets. It shouldn't be a problem of any sort. Don't know exactly where we'll come out, depending on how much cash flow. One factor would be how much cash flow do we gather over these next 90 days. Brian, I don't know how you and Michael are planning. Yeah, this is Brian Willey, I'd just add that, you know, we've had discussions with a number of the banks, and they've been very productive and positive. The banks are excited about this deal as we are. it's, you know, we look forward to increasing that commitment. The other thing I'll just note is that a number of the banks in our facility are also banks in Advance's facility as well. you know, that we expect that the transition over and increase in our commitment, that they will have good support from the banks and, you know, we'll get to closing and then be able to continue on throughout the year. Got it. You mentioned you're gonna get your debt back to where it was before you started buying back bonds last year. Should I read that as you're targeting getting to about $1 billion of debt when it's said and done, or should we stick with the less than 1 x leverage target? This is Brian, and I'll take a shot, and maybe Michael can pick up after me. I, you know, I don't know if we have a specific number at the end of the year. Obviously, it's dependent upon a number of items, and, you know, there's the price of oil and gas and our plan that we're gonna release next month. There's a number of items to think through. We certainly look at the 1 x leverage, and we like that. As Joe mentioned earlier, for, you know, it's not a limit on us, but that's certainly something that we like to be at and under. No specific number, I think, by the end of the year, but we certainly are targeting reducing debt after we do the acquisition, and we'd use cash flow for that. We'd expect to do that in towards the end of the year. I don't know, Michael, if you had anything else? Greg, this is Michael Van, the lead VP and Treasurer. I think that, you know, I think the 1 times, based on where prices are and what our kind of general expectations are, would be, you know, much more an upper limit. You know, we'd expect to, again, prioritize paying down debt and trying to be opportunistic with other things. As that would trend down, I would expect over the course of the year. Yeah. I would just add this, is that we don't really generally have a specific target. We wanna go in the general direction so that, you know, you hate to say, "Well, by December 31st, we gotta be at this place." We may reach that in November or January. It's okay as long as we know the direction and the trend that we're headed and what other opportunities may come along. Then when you're in times as, you know, like we are in now, you just never know when something may happen. That's what happened on this deal, is that I got a call before the end of last year saying they wanted to do this deal, and we got on it. It wasn't in the plans, we always try to leave a little room in there to whatever our planning and not be a prisoner to a specific target, but try to look at, will this interfere with our long-term plans to continue to reduce debt, to build up the value of the assets, and to return money to the shareholders? We think we've reached that point where we wanna be sure we can keep doing all three, but not try to box ourselves in, on any one variable. I appreciate all that. Just operationally, you noted in here you picked up a saltwater disposal well. Is there any impact, is there anything we should be that you're thinking about there with sort of the regulatory focus on saltwater disposal wells in New Mexico? Can you give us a little bit of how you, how you thought through that risk there? Sure, Greg, this is Brian Willey again. I'm happy to take that. We are excited that they, you know, as mentioned earlier, they planned well, I think as they looked at their acreage and being able to have optionality. This is one of those items where they have the saltwater disposal well. It's, we certainly are aware of the regulatory environment in New Mexico, and we operate San Mateo, and that has, you know, 15 saltwater disposal wells, and we're very aware of the regulatory environment there. but we're excited about this well, and we're excited about the opportunity to use it and develop the acreage and this will just be an asset for us and give us optionality as we, you know, go to other third parties and also have the opportunity to dispose in the well. We're excited about it. Great. Just last one for you. I don't know if you have this available, but do you happen to know the impact to your base decline rate from this transaction? If you happen to have your year-end 2020 asset number. If you don't, I'll follow up. Yeah. Well, yeah. We don't have that handy, but we'll. Yeah, it probably is gonna be a wash. Right. Thanks for the time, guys, and congrats again. Great. Thanks, Greg. Thanks, Greg. Thank you. This ends the Q&A portion of this morning's conference call. I'll let you turn the call back over to management for any closing remarks. Thank you very much, Victor. Thanks to everybody who's listening in or who's asked questions. We really appreciate your interest. Wanna make sure everybody knows we are available if you want follow-up or, and want to invite everybody to come see us here and meet the team, and we can discuss these. We want people to know because we think we're headed in the right direction and have built a staff that's ready for a bigger role and to operate a bigger company. It's a group been tried and tested. This the process that we went through certainly has given our board and management group here more confidence. I think it goes all the way throughout the organization, is we had to move pretty fast. Everybody did over the Christmas and Thanksgiving holidays. They squeezed it in. We had to work pretty intensely through the last few nights, and they've done everything but bring their bedroll up here. I'm just enormously proud of the professional way we worked and they worked, and I think it's just a deal where everybody's come together. wanna thank you and the public, our public shareholders for supporting us through that and putting us on a path back towards, you know, $70. we think this year has already started off well. we think we'll continue to get better and make that profitable growth at the measured pace. I think we'll be producing... Ned's gonna have us producing from new zones. These properties will help build out our Pronto system. I can see all sorts of good things. Our location's been built up. Our reserve group is confident we'll be adding to our borrowing base. We just see a lot of good coming from this. We gotta execute, this is a group that I think has pledged to do that. It was a real test of Craig and Brian, and wanna say our appreciation for Baker Botts. They hung through that, when we didn't sleep, they didn't sleep. It's a real neat deal that I think we'll look back, that was another step forward for us, just as we hit a new inflection point, 100,000. This puts us on another inflection point towards 150,000. We don't have the exact details, but you're gonna hear more from us after our board meeting in February, and we have an earnings release there, and we'll afford everybody an extra time to ask questions. We're delighted to be here. You know, as of course in any deal, you wonder sometimes is this effort gonna be worth it or break off. Again, wanna thank EnCap and Ameredev for working with us and the individuals. And, just very, again, very, very excited by how the whole staff plunged in and pushed on that rock 'cause that's what it took. It was a big rock, and we all had to push it. Big deal that we've done. We're glad we did it and excited about the opportunities it's presenting. Thank you, and we really invite you to come see us and see the level of sophistication in our MaxCom room and our MaxPro room, where people go 24/7, that's added new capabilities too. Come see us and get to know our staff, and I think you'll maybe understand and feel the excitement we all have for this deal and the other opportunities that we were looking at, generated by Matador over the last few years. Thanks again. Again, we are open to you. Don't hesitate to call. Ladies and gentlemen, thank you for your participation today. This concludes today's program. Everyone, have a great day.