Good morning, ladies and gentlemen. Welcome to the first quarter 2026 Matador Resources Company's Earnings Conference Call. My name is Stacey, and I'll be serving as the operator for today. At this time, participants are in a listen-only mode. We 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. Max Schmitz, Senior Vice President, Investor Relations for Matador. Mr. Schmitz, you may proceed.

Thank you, Stacey. Good morning, everyone, and thank you for joining us for Matador's first quarter of 2026 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 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 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 that we issued yesterday, I would like to remind everyone that you can find a slide presentation in connection with the first quarter of 2026 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, Mac, and good morning to everyone, and thank you for participating in today's earnings conference call. We appreciate your time and your interest in Matador very much. I've been coming to you for a long time. It's actually 40 years, over 40 years in time, and I can unequivocally say that this is one of the more challenging times over that history, but I also feel very good that our team is experienced enough and our balance sheet is strong enough and our lease position is strong enough that we can meet these challenges. and just want to point out to you what I've heard over the years keeping it simple was to look at three things. Is production up? Yes. Is our production up? Is our capital spending the same or down a little bit? And then finally, is your debt down? So we've reduced debt. We kept the lid on capital spending for those, and our production is up, and our balance sheet is in the best position that we've had during this entire time, so we're ready to meet whatever challenges and opportunities as they may come along, and I'd like to say, emphasize the point about the teamwork here, it's continually gotten better and better and times like this gets everybody working with extra effort and over time we've generally made our best gains in times like this so everybody wants $100 oil or more but these are often times that help build the company and so thank you for your thoughtful analyst reports and we look forward to your questions and want to say again that we're open to y'all. We want you all to know you're welcome to come visit us where we will be able to spend more time and you meet more of our people so ask away, and I turn it back to you, Mac. Sounds great. Stacey, we're ready for Q&A. Thank you very much.

Thank you. Ladies and gentlemen, due to time constraints, we ask that you please limit yourself to one question. Again, we ask that you please limit yourself to one question until all have had a chance to ask a question, after which we would welcome additional follow-ups from you. And with that, our first question comes from Neil Dingman with William Blair. Morning, guys.

Yes, ma'am.

Morning, guys. Nice quarter joe um joe just loved what i asked but i'll just try to focus my first and only question on production growth and just wondering historically you all uh have grown production a bit more than this year and and you know as you pointed out there's certainly absolutely no balance sheet constraints uh when you look at you know now the the balance sheet everything that you all have so i'm just wondering when you all laid out the plan for this year and you think about the growth for the remainder of this year and the next year is it largely influenced by how you see the macro environment? Is it how you all are thinking about the potential incremental capital spend? Or what is the largest drivers behind how you're thinking about laying out the growth?

Thank you, Neil. That's a great question. It multifaceted. As we're looking at it all different ways, is that obviously as variable as this year has been, you know, price of oil is up, war breaks out one thing has been somewhat chaotic so we've discussed all those different plans and what we do in each case and Matador's always tried to be nimble to be able to change plans as the environment business environment changes and we've been through COVID and we came out better from that We've been out at, I don't know, all the different crises that you get in the Mideast. We've come out better from that, and that just reflects, I think, the growing teamwork. We're still getting better and better out here. We've got people we've gotten to know each other really well over the years, and it's really been easy to go down one direction or another. But presently, we think the emphasis should be on getting production up and your debt down and keeping a handle on your capital spending. You want to spend some capital, of course, to keep going, but you just don't want to be reckless with it and make each dollar count. And that's been our approach, and it's been a collaborative effort with each of the department heads, and I can, you know, if you or others come visit us and get around the table with us, I think you'll see the interaction and the teamwork and will leave feeling confident that this is a group that works together and has good ideas, and in times like this, they can be trusted and have proven themselves in challenging environments like this and have produced good results. So that's how we've grown from $270,000 in 1983 to the present market cap somewhere around $8 billion.

Neil, this is Chris Calvert, EVP, CFO. The one thing I would like to add to that, and obviously I think those are great comments from Joe, when we think about growth and the optionality as well that comes with that, you have to forward think about potential restrictions or constraints to growth and I think for Matador we attack those and we look at those in a very unique way. The inventory scarcity question is something that's not really applied to Matador. 10 to 15 years of inventory with extremely good returns, 50% or better at different commodity prices, takeaway constraints. We look at the catalysts that Matador has, whether those are fully integrated midstream business of San Mateo or the Hubrinson catalyst that will alleviate negative Waha pricing in the back half of this year, operational efficiencies that drive capital efficiencies. As we think about growth, you want to have capital efficiencies that come with that. And so for us, we think we're in a position to where when we think about growth, we don't have some of the potential constraints that I think some of our peers are affected by. And so we have that optionality to, you know, potentially grow if we want to. But obviously, we're looking at it from kind of the profitable growth at a measured pace standpoint.

Stand by for our next question. Our next question comes from Scott Hanold with RBC Capital Markets. Scott, go ahead with your question.

Yeah, good morning, all. Good quarter. And, you know, I may actually, you know, kind of keep down the same line as Neil's question. And, you know, look, you guys have historically have seen better and better efficiencies in your operations and have pulled forward activities. So as you look at the balance of this year, you know, what is the opportunity to kind of continue that trend of pulling things forward? And, you know, how much more could that, you know, add to, you know, your growth this year without, like, impacting, you know, capital too much?

Yeah. Hey, Scott, this is Chris Calvert again. And, you know, when we look at it, you look at the first quarter, the outperformance of the first quarter, you know, the production outperformance itself was buoyed by and it helped with outperformance of wells that were turned online in the quarter. Then you also had acceleration of activity. There were two additional net wells that were turned on in the quarter. The efficiency story that drives those results will play out through the remainder of the And so while we did not increase our full year turn in line count, you know, you can go back to the tail end of 2025, the operations team working hand in glove with the midstream team, flow assurance that it provides. We were presented with the opportunity at the back half of last year, the option to accelerate activity at favorable oil field service pricing. And so we made the decision to do that. And so that seems to be historically operationally how we view the world. And so as efficiencies continue to present themselves, there's likely going to be the opportunity to potentially pull wells into the year. But right now, it's just a little too early to kind of make that judgment. So I think for us, we're focused on the production growth that we can from well-out performance and then incremental production growth that is on the back of efficiencies, which comes in leading wells faster into the quarters.

And one other thing is we're opportunistic about acquisitions. the least brick-by-brick approach that we've talked to before and whatever else, there are deals coming down the line. We just try to be careful to be sure that, as Chris said, is that it's proper growth at a major pace.

Our next question comes from Gabe Dowd with Truist. Gabe, you have the floor.

Thanks, Operator.

Morning, everyone. Morning, Joe. Thanks for the time. I was maybe hoping Joe could just get an update on your thoughts around San Mateo, another good quarter out of that entity, and just curious how we should think about any type of strategic options for that asset this year. Thanks, everyone.

Gabe, that's a great question, too. And if we give that a lot of thought, the midstream has turned into a very valuable asset, not just in money terms, but also in providing us with efficiencies and flow assurance out there in the basin where sometimes that can be difficult. So it's been a great asset. Obviously, one thought has been is to take it public, although we can't really say that, but we're not trying to tempt the market. It's just we don't want to go out unless it's a good time. We don't need the money, but it's an important catalyst for us because it's grown in some of our literature. You can see how many miles of pipeline that we have. You know, it's flowing water, gas, and oil. And it provided great flexibility to our operating group to be sure we get our product to market. it. The Hugh Brinson deal that we've discussed is an excellent example of what it's done for us. When Waha has had so much Navy pricing, the Hugh Brinson is coming online and moves us away from the Waha market, which is Navy, over to Henry Hub, and we think it may make as much as, you know, 50 cents an M difference and multiply that by the number of the gas production we'll have this year, and it's an enormous difference. And we're very excited about that. And getting to work with ET, I think they've been a top-notch operator, very innovative, and that we see that as a great relationship with each other that can continue to expand. And we have other good partners that have been midstream that will give us other opportunities as our production in the Delaware is all around the Delaware. And it's not in one location or one field, but it's now throughout that basin. And so we think we're set with a property set, you know, take away capacity, you know, experience rigs, experience people, that this is our time to continue to progress. Our next question.

Y'all want to add anything, Chris? Yeah, I think the one thing I would add to that, you know, Gabe, the one thing with San Mateo and the Matador wholly-owned midstream assets, the strategic value of those as they pertain to the Matador E&P upstream side is the flow assurance and really the operational control. We talked in the first quarter release at length about the efficiencies on the upstream side that come in partnership with the San Mateo and really just the midstream business that resides here in Dallas with us. You know, you can talk to water recycling, whereas 30% of the volumes of the Matador E&P recycled water volumes that we used in the first quarter came from San Mateo or Matador-Jolion midstream assets. We're actually increasing an investment. We're building a new water recycling facility, began construction this quarter that will assist and continue to grow both the upstream side from a CapEx savings perspective, but also a revenue side on the San Mateo side. From a gas use perspective, field use gas has been utilized in southeastern Lee County with a lot of Matador operations that we talked about that mitigate diesel spend. And so the flow assurance and the operational control is something that we are going to be focusing on as we continue to analyze the dropdown for the strategic alternatives with San Mateo. But first and foremost, it's that integrated business that we want to make sure we're thoughtful of because, once again, we don't need the cash. We just want to find the right deal, specifically the right deal that increases the value to the Matador shareholders to where we can pull that value forward.

And, Gabe, this is Glenn Stetson. I would just add on to what Chris said in terms of the use of field gas. And so we highlighted in the release, but by using field gas as opposed to compressed natural gas that is trucked to location for frack, we save an average of $100,000 per well. And that advantage is in large part due to our relationship with our unique relationship with San Mateo and Matador's midstream company. And in Q1 and today where prices are negative, in addition to those $100,000 in capital savings, we are burning that gas in the field for hydraulic fracturing operations as opposed to selling them at what negative wallhawk pricing.

Our next question comes from Zach Parman with J.P. Morgan. Zach, go ahead with your question.

Hey, good morning. Thanks for taking my question. One thing you mentioned in the release is that you drilled your first Woodford well.

Could you give us a little more detail there?

What are your expectations on that well? Maybe could you talk about what the inventory opportunity set could look like for the Woodford if that well does prove to be successful?

Thanks. Hey, Zach, this is Chris Galvert again, and I'll pass it over to Andrew Parker here in a second. But I think, you know, expectations of this well, you can look at surrounding offset production. We have strong encouraging expectations that this well will come on from a hydrocarbon perspective operationally. Things are moving right along as well has been successfully drilled in case with completion operations ongoing. From a productivity standpoint, we can expect to discuss this probably on the next call in July, but I think I can take it over to Andrew Parker here to talk about some of the geoscience. Yeah, thanks. This is Andrew Parker, ADP of Geoscience. Thanks for the question. We're real excited about the Woodford. This is a huge catalyst for us this year, and the land team has really done a tremendous job putting this position together but more importantly the whole team has really just done a tremendous job executing on this first well so we're we're excited about it it's it's still early but you know we like our position we like our chances here and you know we're looking forward to reporting more later in the year but so far so good and Zach this is Tom also I'd just like to remind everybody that we haven't currently counted any of the wood for in our inventory today.

So that would be the upside if we get success there.

Yeah, either in the reserves or in the laced position, it's just been done.

Our next question comes from Phillips Johnston with Capital One. Phillips, go ahead with your question.

Hey, thanks for the time. I wanted to ask you about your quarterly CapEx cadence for the year. Your second quarter guidance implies is you'll spend around 55% to 60% of the budget in the first half of the year. So I wanted to get a sense around the shape for the second half. Would you expect it to be fairly rateable at a little over $300 million in both Q3 and Q4, or is one quarter significantly cheaper than the other?

Yeah, this is Chris Calvert again. Thank you for referring back to the first quarter. I think the 55% to 60% guidance that we put out with the February release, first quarter, where we came in the first quarter of 428 was right in line with what we expected. The second quarter, midpoint, if you put those two together, it puts us right in that 55% to 60% range. And so the first half of this year, the capital spending is exactly in line with what we told everyone. As you look at the back half of this year, It definitely steps down from where it is on a quarterly basis. We haven't really put any sort of forward messaging to it, but you can look at whether it's till cadence, over 50% of our tills are occurring in the first half of this year, so you would expect a sizable drop in the back half of this year.

But once again, as efficiencies shift, I think it's a little too early to put any sort of capital cadence to the third and the fourth quarter, other than they will be down from the second quarter number. our next question comes from paul diamond with city paul go ahead with your question uh good morning thanks taking the call i want to touch base on your uh improving dnc pro lateral foot talk about the is the levers you see available next coming quarters and i guess the trajectory here getting down to that you know sub 800 level yeah this is chris calvert again and i think

I think the range that we put forward in the beginning of the year, 785 to 805, you know, 6% down from where we were in 2025, and I think as we look at the levers to maintain and finish towards the bottom end of that range target for the year, it's a lot of the similar levers that we have spoken to in the past. It's multi-well completions, utilization of simul and trimul frac. It's the full utilization of electric fleets with 90% reduction in diesel usage, continued water recycling usage, and improvements in water recycling. In the first quarter of 2026, we recycled over 70% of our water came from recycled sources. And so looking forward, how do we continue to push that? It's drilling and completing wells in shorter cycle times. year over year. We're about 13% faster just on average from cycle times. But I think the really impressive parts of this are in the deeper parts of the basin as we extend laterals, the improvement grounds that we have made. And so if you look at three mile well laterals, for example, in 2025 versus 2026, our best three mile well we've drilled this year in under 16 days, which was a 40% improvement versus 2025. And so I think as we look at levers going forward, it's going to be reduced drilling times, increased use of recycled water, vendor relationships, AI integration within certain operational processes, MaxCom integration, our MaxCom room here, we're in our eighth year of MaxCom, continuing to see improvements, continuing to see records broken, three-mile U-turns. I think the laundry list is long of levers on how we can continue to improve upon that Our final question this morning comes from Philip Jungwirth with BMO.

Philip, go ahead with your question.

Thanks. One of the other Delaware operators this week was talking a lot about AI and just wondering how is Matador either implementing or looking at this in its own operations to enhance efficiencies on the production optimization side or also help on the drilling and completion side.

Phil, we kind of gang-tackled that around here, and it's coming contributions to executing a confident AI program is coming from different people. It's a committee working together. Glenn Stetson is somewhat the leader, and Jordan Ellington of that. And the effort is to understand it, think about applications, but again, make sure they're not missteps and that people, as you go in a controlled, organized fashion with your group working together, it builds confidence. So we're trying to learn it at a major pace, too. And I think Glenn can give you more specifics, but we see use of it. But, again, you want to build confidence if you put it to use and it fails in some aspect of it. You get people that might be leery. So we want to go slow but sure and make sure it's practical and fits in with what we're doing. It's pretty remarkable, but I think it's like any tool. You've got to be careful and be sure you understand its use. Glenn?

Yeah, Phillip just – yeah, Joe said it, I think, nicely. we're continuing to increase our integration of AI-driven analytics in pretty much every facet of our operations. On the production side, you know, we've looked at this and we bring in over 40 million data points a day, and we have a control room that is monitoring those data points along with our field staff in real time. And, you know, the goal for us is to make those actionable and help to reduce downtime and, you know, identify inefficiencies so that we can address them as quickly as possible. On the completion side, you know, similarly activating, you know, time monitoring what the hydraulic fracturing operations, the pressures, the volumes that are coming in from a water side and from a sand side, even in terms of logistics, I think is helping us out greatly as we expand the use of simul and trimul frac. All of that becomes paramount. And then on the drilling side, Chris mentioned MaxCom. We set over 36 records just in this quarter in different hole sections and in the lateral, using AI to help target in the lateral to make sure that we're not just in the preferred target, but in the preferred portion of the preferred target, and making sure that we can drill faster, that ultimately, you know, you put it all together and we get the results that you saw in Q1. that we hope to replicate and continue to replicate and get better.

Yeah, I think you all have done an excellent job. And I like to stress that the committee is made up for people of all departments. Not that everybody in that department is, Bill, but there's a representative from each of the departments so that their recommendations are backed by a whole team and they've been working together in a very nice way monitored by our board and we're optimistic that it's going to have an application more so in some areas than others, but it's for real, but you just don't want to make a bunch of mistakes as a caution and have the staff lose confidence in the work that it's doing. So I'm very pleased. I think the whole management team, Van and Brian, are all saying to you as others that this can become a very important tool for us going forward. Brian?

No, I think that's right, Joe. Joe, I think we're taking, you know, we're really, really proud of the approach we're taking to this. We're, you know, being methodical about it. We, you know, we see the benefit of it. And as Glenn and Joe talked about, we're seeing real applications that we're able to get real value from. But I think, as Joe said, we're going to be fat followers on this. We're not going to jump in and make a bunch of mistakes. And so I think we're taking the right measured approach with it.

Thank you. Ladies and gentlemen, this ends the Q&A portion of this morning's call. I'd now like to turn it over to management for any closing remarks.

Thank you very much for that. And I do want to encourage, you know, the people that are listening, if you have follow-up questions, to please call Mac Smith here at the office. And, Mac, give me your number.

Yeah, you can reach me at the investor's inbox, which is investors at matadorresources.com, And our phone number is 972-371-5225, and we're always available.

Second is, you know, if you're here in the area, come by. We are a public company, and we like meeting our shareholders. As you know, we began not through private equity but through friends and family, and we try to perpetuate that feeling even today that we like knowing our shareholders and like all of the owners and to be sure that you know that we're putting your interest first and that we want to invite you to our annual meeting this summer. And I think we have a display of equipment that you get to see the drill bits that we're actually using and meet the young engineers and geologists that have led this to a successful program. And same thing on our completion activities. I don't think Cliff gets enough attention on those, but has done an excellent job of continuous improvement of our fracks, working closely with our vendors on that and their research. So we think that some of this that you get to see, the industry has made great strides over the last 40 years. And when they see pictures of me on the first year out there in the old Kelly Riggs, the drilling engineers think I was driving a Model T or something. but the industry's made a lot of progress and still making a lot of progress. So I think our outlook is very good, and we take a team approach on all of this. So if you have other questions, call in to Mac, and we'll try to take care of you. Back to you, Stacy.

Ladies and gentlemen, Thank you for your participation today. This concludes today's program.