Good morning, ladies and gentlemen. Welcome to the First Quarter 2017 Matador Resources Company Earnings Conference Call. My name is Iaela and I will 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 through May 31, 2017, as discussed in the Company's earnings press release issued yesterday. I would now turn the call over to Mr. Mac Schmitz, Capital Markets Coordinator for Matador. Mr. Schmitz, you may proceed.

Thank you, Iaela. Good morning, everyone, and thank you for joining us for Matador's first quarter 2017 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. Finally, in addition to our earnings press release issued yesterday, I would like to remind everyone that you can find a short slide presentation summarizing the highlights of our first quarter 2017 earnings release on our website on the presentations and webcast page under the investors tab. With that, I would now like to turn the call over to Mr. Joe Foran, our Chairman and CEO. Joe?

Thank you, Mac, and good morning to everyone on the line and thank you again for participating in today's call. We appreciate your time and the interest in Matador very much, and we especially appreciate the many kind words that a number of you have for us and – but how much we appreciate those and how much they meant to us. Now I would like to introduce the senior members of our operating staff who are joining me this morning and are standing by for any questions you may have. They are Matt Hairford, President; David Lancaster, Executive Vice President and Chief Financial Officer; Craig Adams, the Executive Vice President of Land, Legal and Administration; Van Singleton, Executive Vice President of Land; Billy Goodwin, Senior Vice President of Operations; Brad Robinson, Senior Vice President of Reservoir Engineering and Chief Technology Officer; Gregg Krug, Senior Vice President, Marketing and Midstream; Matt Spicer, Vice President and General Manager of Midstream; Trent Green, Vice President of Production; Rob Macalik, Vice President and Chief Accounting Officer; Kathy Wayne, Vice President, Controller and Treasurer; Bryan Erman, Vice President and Co-General Counsel; Brian Willey, Vice President and Co-General Counsel. I am proud to announce this first quarter of 2017, which of course is one of the best quarters delivered by the Matador staff and I would like to highlight – to thank the staff, everybody really pushed on the rock this quarter and made to trying run on time. Now I'd like to highlight a few key points before taking your questions. As we've been on the road the past month or so meeting with number of shareholders and attending the couple of conferences, a number of questions routinely came up. And we're here to answer all of those, but also I'd like to be sure to know on the financial that we're pleased with the financial status of Matador we've got over $200 million in the bank and that's been drawn on our line of credit. And second that this quarter obviously has record production, but a larger, larger contribution from the Delaware. Third is our midstream joint venture with five points is off to a strong start. And they have further plans in line that we'll be happy to discuss today. And finally, we're an oil and gas company. And I think some of the technology advances in the better operating prices that have been advanced by our staff or really extraordinary and really helping results as we should get in today's conversation. So with that, I'd like to turn the call back to the operator for your questions.

Thank you. [Operator Instructions] Our first question is from Irene Haas with Wunderlich. Your line is now open. Our next question is from Neal Dingmann with SunTrust. Your line is now open.

Good morning, guys. Joe, question for you. The group you've done a great job on these smaller acquisitions at great prices. Number one, just would do you see the potential continuing for that that these levels or just if you could expand a little bit on what you see for acquisitions out there?

Yes, Neal. Thank you. It’s a good question. And the answer is obvious, so yes, we think these will continue to occur. What – I think you maybe think about this is that we're acquiring acreage in several different ways, several different pipeline so to speak, but one is just this out there nibbling away 500 acres here, 1,500 acres there, averaging about 1,000 acres a month and we have over 100,000 acres now, and if you do 1,000 acres a month that adds 10% for the year, which is pretty good. And it's a lot of hard work. It's kind of like door to door selling, but the staff has got a full pipeline and has done really good work just nibbling away. The second pipeline is that when we've been proposed wells low almost always by the time we drilled a well acquire some additional interest from working interest owners who want to make a deal as opposed to participate in the drilling and we welcome that and try to be fair with them. And so they all want to do it again, down the road. And then the third area that has been working now is there's been a lot of cooperation out here in the Northern Delaware between the operators have tried in acreage. That is a win-win deal. We tried acreage it's in somebody else's section for similar amount of acreage in our sections. And we get something greater value to us than they give something of greater value to them and both sides comes out ahead. And so there's been a lot of great cooperation on there on operations. And so we've always liked the Northern Delaware in part for this reason. And then we've also have another pipeline on working on some mineral acquisitions, which enhance working interest position. So we feel pretty good going added it all different ways and that wouldn't lose the needle for Marathon or Chevron or ALG, but it's working for us at this point and I give a lot of credit to Van Singleton, our Head of Land and his group of Land team. There have been – have done a lot of solid work and they build a lot of good relationships out there.

Okay.

I don’t know what – Neal and what Joe saying there, he is talking about that adding a 1,000 acres a month, we use a term around here surgical nature and I think it's exactly right. The 1,000 acres that we're adding, we thank you, it's really, really good acreage and really good value. So its – I don't think that you have to add at 5,000 or 50,000 acres at a time. I think you can do it 5 acres or 500 acres at a time as long as you're doing in the right areas for the right price.

Now to certainly simply working guys and then just one follow-up, Joe that Antelope Ridge you added certainly seems to be very attractive. I know it's early when you guys do start develop on that later this year in Antelope Ridge. Do you have a plan as far as, what you'd be target would be similar to, what’s your target and some of those other sort of Delaware's around that or any color you give around how you see a sort of tackling that later this year?

Well, obviously we're very excited and pleased to be build in the position at Antelope Ridge. It offers a lot of opportunities and I don't think we decided which only want to test first in there. And we want to say a little more if we're able to acquire some additional acreage, but we've liked that area for a while and are pleased to have at least a footprint in there. The other thing, on this on acquire an acreage, if we – I don't want anyway think we don't look at some of the bigger packages. But we're on – we had quite business as acquired in smaller chunks, but we'll look at that and we may well do a deal some time on a bigger package, but if we do, it will certainly have a very close mix as probably with what we have where it's on a better than average fair. And it will have some midstream rights to it, because midstream has been really cooperate become part of our business like land or geology or engineering. And those two can enhance each other then it certainly gives a greater rationale for doing a larger more expensive acquisition.

Thanks for the color guys. Keep up the good work Joe and Team.

Thanks, Neal.

Our next question is from Irene Haas with Wunderlich. Your line is now open.

Hey, thank you. Can you hear me?

Yes.

Yes.

Good, great. My question has to do with this quarters you guys have showed a lot more results from the Second Bone Spring to what's the Northern Delaware basin. This is probably a bit new. And can you do a little bit of comparing contrast and your feelings as to how much proper you may need to put into these shell or horizon.

Irene, this is Matt. And it’s a good question. We typically – trying to big on this traction. So we pump some with 2,000 pounds per foot and had good results. We're testing some with 3,000 pounds per foot that we're also having good results. And then as always it's a process to evaluate the IP to 30-day the three-year number. So we're encouraged by the higher profit volumes. And in addition we're pumping diverters now on some of our Second Bone Spring, we've got to look at, if your diverters that are working. So it's kind of a mix of continuation of how these things evolve with lot of the volumes are good right now.

And how is the performance versus your deeper horizon and sort of equivalent economics as a cost led to drove these wells?

Yes. I would – this is David, Irene. I would say that that the initial performance is pretty well as expected on these wells. They may not have initially quite as high IP rates, but they often will tend to decline a little bit slower. And I think that just a little bit of results of the fact that it's more of type sand than to do this shale. And we have some really – if you go back two or three years, when we refers to drilling out here and talking about the Ranger 33 and one of the first wells, those wells have continued to perform very well and are up around our 700,000 BOE type curve, but I think as we showed in our Analyst Day presentation that the returns from these wells, if we kind of hit that even if the lower end of the window at 500,000 BOE with $50 all and if we can get these wells down for $5 million or so that you're talking 78% kind of returns on those wells. And I will say that couple of the recent wells that we've done that the Eland's that we talked about in the release, we got both of those drilled for around $5 million, maybe just slightly less when it's also done. So I think we feel pretty good about the returns and they can be very comparable with what we see in the deeper horizons as you point out, because they are little bit cheaper to drill. So I'd say so far so good.

Great, thank you.

Our next question is from Scott Hanold with RBC Capital Markets. Your line is now open.

Yes, thanks. Good morning. Could you discuss a little bit of in Antelope Ridge. From the infrastructure perspective is that going to be pretty well integrated with San Mateo and remind me of any like current dedications on that acreage over there?

Thanks, Scott. It's too early to predict exactly how we'll configure that. Of course it's – I would say it's likely the San Mateo will be evolved, but it's just too early. We process all of the options. We're very shaded by Antelope Ridge and think it's going to fit in well with what we already have. And so those plans are being tried to put together and to say what which way we can go the land most day. We're not just trying to build at San Mateo. We're trying to build at the overall value of the company. We think San Mateo was again likely to play role, but we want to maximize the opportunity. The acreage at Antelope Ridge is not dedicated to San Mateo at this time. It is not dedicate anybody. So we haven't the San Mateo. We didn't obligate ourselves to do that. We think your logical option, but we also want to see whether there are opportunities might be out there.

And Scott, this is Matt, in regards to the infrastructure that's a very much like the rest of the basin. There are existing pipes in the ground and roads in power and all that stuff due to the legacy production out there. So it's something that we're able to kind of take a measured pace approach about how to do this JV thing out there whether we're or what it's going to be, if it's going to be processing the salt water disposal or both or if there's enough of those capacities out there for us to utilize what's there. So it'll be a process.

Okay, understood. And a follow-up question is on the cover some state well. It sounds like you're encouraged with what you've seen so far. Is there any kind of color you can give us on what you have seen so far in terms of like all saturations in pressures during drilling?

Yes. Hi Scott, this is David. I think we're probably – would probably prefer not to say much more about the well than what we disclosed in the release, look we were happy with the way the wells drilled as we mentioned it a drill little faster than we thought. And we saw some good some nice shells on the wellbore as we went along. And so that's always – those are always nice signs, but I think we're a long way from still knowing what we got there. So I think at this point, we probably prefer just to sort of leave it there.

Okay, fair enough. Thanks.

Our next question is from Dan McSpirit with BMO Capital Markets. Your line is now open.

Thank you, folks. Good morning.

Hi, Dan.

Hi, Dan.

How much more blocky or contiguous will the Company's leasehold look at the end of the day through these acquisitions or trades. That is does your footprint change more in complexion that in size.

Dan, that's just – that's impossible to say what you're there be like whether your demographics going to be in a given area. You don't know how the population is going to grow. You just know it's going to grow. And we're not trying to do one and say, we're only going to grow this way. We'll take the opportunities as they come and I think the footprint will continue to grow in fits and start. So that you will get more blocky, you'll get more acreage and then you'll fill in the gap the down that's help. So that’s hard to say, but they're not saying working in New Mexico is you have a degree of force pulling that if somebody general and drill, you can generally follow your perceiving and get them to like one way or another. So it's harder to block than say in Texas where if you have a gap, they can just stay out if they want.

I just – Dan, it's David. I just to kind of add to what Joe says it's certainly I think there will be a little change in the complexion. I think there will be continued change in the size as well. So I think things will go in both directions, but as far as it's changing the complexion, I again sometimes these trades don't sound like a big deal when you talk about affected maybe you traded 500 acres here, 400 acres there, 100 acres here. I mean it may sounds sort of small, but some of those 400, 500 acre trades, you know, can lead to I know we have one that we’re working on right now that when it finishes up, it probably will add 15 or 20 locations that we can drill and operate than we couldn’t before. So I think that’s – here is what the drilling. So it could make a real big difference.

Well, I appreciate the color and appreciating certainly that it’s a – it remains a work-in progress and very much an active development. As a follow up to that the market seems to be coming your way that is other – and maybe in some cases much larger operators if you’re to be getting more aggressive in the Northern Delaware either through acquisitions or putting capital at work, that’s certainly a good thing. But do you anticipate the market for completion services getting tighter than maybe initially anticipated once it maybe cost inflating at a faster pace?

Well, Dan, I think it’s not a single variable. I think you have got a number of variables that will have influenced at. One is price. If you know I don’t say if price goes down that will become more available and if price goes up you may have some increase in competition. The other thing to keep in mind is I think that’s why it’s important to have longstanding relationships with these companies. We have longstanding relationships with Halliburton and Schlumberger and Baker. And we – and I’ve worked with this really well. We have on dedicated crew at this point and we’ve been picking up a second crew from time to time. And our SaaS have done a good job of fitting a man and getting them done at the same time. So the logistics have been good and there have been price savings. But hey, I would like to have the high class problem of increased competition and with even some price escalation because that probably leans oil is getting up there, approaching $60 or so. And I would call that kind of the high class problem. I think – I mean it’s nice to have a lower cost, but it’s even nicer to have higher prices. So if that should happen, we gladly deal with it. And if not I think things are working pretty well after it. Matt, would you add to that..

I agree, Joe. And Dan not to keep beating on it, but this relationship deal is really important. And one of the things that I think we made a lot of headway last year is continuing to operate in the basin and utilizing those services and there’s some follow through. There is some momentum that comes along with that. And so, I would like thank and it’s worked out so far that we’re going to be giving a good audience with those service providers. And then Halliburton has done a great job. And as Joe said, they’ve actually provided a second crew to us when we needed and it’s not that we have to commit to a second crew for so many days. It’s kind of like when you guys need it, let us know. Give us sometime, you know, there is a lot of planning that’s involved, but we get a few wells that were teed up to be completed and we thought we needed a second crew, so we added it. And that came in and did some work, they have gone away and they’re going to come back here pretty soon to get us called up. So I do think that Joe is absolutely right. There is going to be commodity price that’s going to pick. And it’s going to be – to me more of a timing issue then it is necessarily availability. I think there is lots of equipment that’s on the bank if you will that’s ready come back to work, finding personnel to do. That is going to be an issue and again that’s step up in running. So it maybe a little bit of a lag, but I think our relationship with our service providers will help us through that.

I appreciate the answers. I could use a high class problem myself. Have a great days guys. Thank you.

Thanks, Dan.

[Operator Instructions] Our next question is from Geoff Jacques with IBERIA Capital Partners. Your line is now open.

Good morning, guys. Thanks for taking my question.

Hi, Geoff.

Hi. Geoff.

On that third rig in Rustler Breaks, I know you mentioned in the release the possibility of moving that over analog bridge in the second half. Could you discuss what circumstances that you guys would do that?

Hey, Geoff. It’s David. Sure, I think really it’s just probably a matter of we just finished acquiring some of that acreage. And there's one particular piece that we have our own to kind of put our first well on. And it’s just a matter of sort of digesting it and have the team go through their planning and get the well on the schedule and get it permitted and get it ready to go. So and I would imagine of course if we move the rig older, we’d probably want to do maybe two or three to get started. And so it’s just as much as anything. It's just kind of starting to get the logistics lined up around that. I can assure you there are a number of people that are very anxious for that to happen and that are working very hard to try to facilitate that being more of a 2017 event than a 2018 event. So I wouldn’t be surprised if we do it, but we do have a few things, we got to do to get it ready.

Excellent, thanks guys.

You bet.

Thanks, Geoff.

Our next question is from Richard Tullis with Capital One Securities. Your line is now open.

Hey, thanks. Good morning everyone.

Hi, Richard.

What’s the plans for the – over the next several quarters for the acres that you have on that Jackson Trust area given your Totum will results in some nice offset operator Wolfcamp results.

Yeah. Hey, this is David again. We have a another well that’s in that vicinity that scheduled to spit I would believe in the June-July timeframe. And then we’ll kind of look at that well and then currently we have another well, but another couple wells that we're probably be come back and drill right toward the end of the year. So I think we'll definitely have one more test that will get on production this year and then we have a couple wells that we drill but they probably won't come on production until the first part of the 2018. But look we're really pleased with the Totum results and how it's continue to hold up also kind of encouraged by some of the stuffs that's going on to the east of this you know there are now. So there have been some nice wells reported by other operators to the east. So I think that that we're of course always good stuff to the west there. So we continue to be very encouraged with that and I think we'll continue to drill there pretty methodically over the next two quarters.

That’s helpful, David. And what’s the acreage holding today? I know you have about 8400 acres in general Loving County, but how much of that is Jackson Trust?

There is – I could believe on a net basis, Richard, but it’s a 37,150 and I think that’s a 7500 acre track that we have a 50 interesting in and so we have a few partners there as well. As far as the acreage holding and should not be a problem there because the – that particular lease it's one lease for the entire position and it requires us to drill a well I think it's – every hundred eighty days. So really you know a couple wells a year maintains that lease by continuous operation. So with continued success there, we certainly should have no issues with continuing to hold the acreage there.

Okay. And then just as my follow up. Joe, it seems like often ask you what oil to get you to accelerate activity and given where we are currently? What would oil price could get Matador to consider slowing activity and where it might that lower activity be concentrated if you did decide to go that route?

Well, Richard, we all know that’s a $64,000 question so to speak. And once again, I'd just say it's not a single variable that's going to motivate us one way or the other. We keep an eye on what the oil price is but we also keep an eye on cost. And we also keep an eye on what kind of well results that we can expect and we keep an eye on – enter the overall drilling program in delineation effort. And so, you could drill a well that maybe wouldn't be the highest return, but sets up everything else in that area and defines whether Wolfcamp or the Bone Spring or some others zone is it will be the most productive. So that in general terms the stronger the oil price, the more likely it would be to add something. But we also keep an eye on the balance sheet is simply we're not as Matt likes to say proper growth at a major pace just because you have a temporary surge in oil, but you don’t think would be sustained, you wouldn't go and do it. And the same thing is – let’s say you want some sustainability there and you got a personnel, do you have the right personnel or do you need to add a few more people to cover that this well because you don't want to go down in quality or down in cost or down in efficiency. So there is a number of variables and – but I think it's plain, it’s the stronger the price the more likely it is, but there are some other factors that that we will weigh and we just don't want to have our salesman.

Yeah, Richard, I’ll just add to that. We really think about these things from a long term perspective. And there wasn’t very long with [indiscernible] with $26, $28 a barrel and we got a lot of push back about why we continue to operate in the basin. And we have made a lot of headway during those times. And we’re really glad we did that. To Joe’s point, we were able to upgrade our personnel. We were able to upgrade our equipment. We were able to make a lot of progress, so we don't want to lose sight of that. We don't want to be the ones that pick up three rigs and then let three rigs go in three months you know that's never going to be us. We're going to be a little slower to react either way.

Thank you, Matt.

Yeah and I think that what Matt is saying, last year worse and one of the thing I’d like to add is that we have a lot of optionality on this rig count is that we've been assured. We pick up another rig if we want it later this year at the same time. That three of the rigs are on more than a year contract, but two of the rigs are on the short term. So things would go down precipitously. We could be back to three rigs if that were the case or we could go up and we've suggested the six. So that's been some of the path and Billy task was to be sure we had a lot of operating flexibility and options with the rigs. And well pleased to have Patterson has done a real good job and we’re got a chance at provide us. We-re really a state-of the art rig. They were interested in acquiring. I mean they are using or we're going to use and that would give us a chance to say how much faster you can drill some of these wells, which may obviate the need for a six rigs. I mean you may be able to get the efficiencies down and if you have more that you have a Bone Spring program, you might be able to do with fabrics what formally required six rigs.

Well, thank you, Joe. That's helpful and congratulations on a good quarter.

Well thanks, Rich. We appreciate your interest.

Our next question is from Mike Scialla with Stifel. Your line is now open.

Hi, everybody. I want to see if you could talk about any trends you’re seeing for price differentials and any thoughts about entering from transportation agreements for either gas or oil and I guess also are you seeing any issues with any of your higher gravity crude in the basin or condensate?

Well first I’d like say is that our market midstream group is not fit out of the park on the differentials. They've really reduced the differentials before much – much better than expected. So [indiscernible] Gregg Krug to answer the question.

Okay, all right. Well, yeah this is Gregg Krug. One thing we have seen as far as the differentials have narrowed as far as when I say I'm talking about trucking costs and so forth. Those have gone down, which helps on the bottom line. As far as the dips are concerned as far as [indiscernible]. We've seen that spread out a little bit, but then also – we really think that that is a problem with more of a baked in number more hype than anything because we're not really seeing any issues at all when it comes to capacity issues. And as far as on the crude side as far as gas side is concerned we’re always looking at those opportunities for additional capacity as far as we're looking at that makes sense for us to do that. And right now we're not seeing any of those issues, we've got plenty of capacity. We've not been curtailed at all. So that's really at this point in time it's not a huge concern of ours but there again we are also always looking at that and we're going to quickly adjust our thoughts on that as far as if we need to act on acquiring capacity

Okay, great. And Gregg on the higher gravity crudes, I can’t say prices seen any weakness relative to the lower gravity crudes at this point?

.:

Mark, this is Matt. I guess kind of I want to add one thing to what Gregg said there and how we think about things maybe talking about we are always looking to make sure we’ve got capacity when we need to get firm capacity, we are going to secure firm capacity and I’ll add. But I think it really works nice with the midstream theme and E&P theme. Let’s say we are actually talking to one another, working together and so when we go out and acquire capacity on some of these pipes what we can do, in the midstream its – we could secure enough certainly from Matador’s gas and Matador’s oil and then have some third-party stuff, it could be interruptible and just kind of feather that in and says we go along. So its really a nice blend to have the E&P team and the midstream team under the same roof and talking to one another.

Appreciate that. That’s great. My other question is probably pretty difficult to answer at this point. But if the course and state well does happen to work the way you hope. Could you say how that – of that 31,000 acres or so that you haven’t the Twin Lakes area – how much of that would become – how much could you I guess derisk with one well. As I know you’ve got another well plan for later in the year that’s quite a bit further to the Southwest. But just trying to understand the play a little better?

My comment – I try to answer your question first but invite anybody else here may add to comment. It would be hard to say how much of that acreage you derisk, I think one of the important things is that it's become a more active area and there are other companies that are starting to drill some in there. Cimarex and I think Devon several others have been looking in that area. And so part of our hope would be there would be that you really accelerate the derisking by as other operators get interested. The average in the areas is being bid up, its costing more so its become and certainly an area of greater interest to the number of companies which will help in the derisking of that acreage. So I hate to say that based on a two or three data points that that completely defines that area because we all know how much geology can change over a short range. But we’ve seen so far has been very encouraging to us and we think it will develop [indiscernible] they said first nobody gave anything we started doing a few things I just started doing anything pretty quickly everybody began to feel increasingly comfortable. Matt, what would you add to that?

Yes, expecting what you have to say there Joe. I think one well definitely won't derisk the acreage but I do feel that this well should really kind of help hopefully confirm the play concept up there. We're going to follow that up with as you mentioned a well in the Kemnitz area later this year. And I think its worth pointing out that when Matador acquired acreage up there, we did it in a very surgical fashion. So I feel like those acreage blocks are very deliberate and we shows the best places to be a bare. So we're looking forward to getting the D. Culbertson online and then I think the Kemnitz well really should help confirm that outside of the play also.

And then I guess sorry to fail in my two questions. Let me – that 31,000 acre position is that be pretty well set with that now or is there any opportunity to add to that at this point?

Yes, there's opportunity to add to that. Mike and we may do, so we have a pretty full play. We haven't had a lot of extra to put in here or other places and they kind of the plans on the deal terms is as they come up. We like the position that we have there, but we'd like to add on these bolt-on the pipelines that working pretty good for these bolt-on acquisitions and others. And so we've kind of stayed with that, but where we're balance in the equation. So I don't want to rollout further acquisitions in any of our areas diary.

I would agree Joe. I think there's still there still lots of opportunities to add to the position and I think a lot of that is just kind of going to be a function of savings well results and but if we decide to we certainly can Mike.

Great. Thank you, guys.

Thanks, Mike.

Our next question is from Adam France with 1492 Capital. Your line is now open.

Hey, good morning, guys. Thanks for squeezing me in.

Hey, Adam.

Hey, Adam.

Guys as you go about this 1000 acres a month and surgically add in your core areas where are you thinking you most likely take your laterals out longer? And can the second I mean do you have an opinion add is to whether the Second Bone Spring well that I think were 4,600 feet and can a Bone Springs handle 7,500 foot laterals any thoughts there?

Adam, this is Matt. I think the answer to that is we do like the concept of longer laterals to a degree. It's as we've discussed before I think you get out there around 10,000 feet, 11,000 feet, the world – in a mechanical world really changes. There's a lot of risk that’s there, but the Mallon wells we drill were 7,300, 7,500 foot laterals. So we'll continue to do those type of things in New Mexico when and where we can down in Texas in our lowing county asset. We historically have drilled those laterals to fit the geometric shape of the leads. So we've got to longer laterals down there. We've got longer laterals planned for this year. We've drilled some longer laterals in the past. So the answer to your question really is when and where we can, we like them Adam up to a certain point. And I do think the Second Bone Spring would benefit from longer laterals just I think almost all those reservoir wells.

Yes. And hi, it's David. I might point out to a couple of things. A number one, we have drilled several longer laterals down that Wolf with all I believe better wells were 7,500 foot laterals and I think it's Matt mentioned, that at least limit itself very well to longer laterals going forward. So as we as we get into more the heart of that acreage I think you'll see more longer laterals there. And also just to remind you, the Mallon wells were 7,300 foot lateral, so Bone Spring well will accommodate them very well. So it's just a little more of work and through the land issues as Matt mentioned.

And how long is the lateral on the Twin Lakes well?

It's about 4,500 foot I think it's your standard capital one section lateral.

Got you. Great, thanks, guys

That's another – I will say Adam, thank you for kind of ask you that too, because that is another area which we certainly would have the ability to drill longer laterals on and have looked at that as well and likewise over to Jackson Trust that's a place where it can lend itself to some longer laterals as well.

Thank you, guys.

Our next question is from Ben Wyatt with Stephens. Your line is now open.

Hey, good morning, guys.

Hi, Ben.

I've got kind of a random question, couple questions for you. I don't really think Matador is affected here, but would still look to kind of get your two sense on the question. In my understanding is that when you go up into New Mexico, when you get a permit and you also have to present a gas capture kind of plan with that. I know you guys are well ahead on the midstream side with the Rustler Breaks plan. But just – and basically you kind of have 30 days to flare gas up there if I understand correctly. Does that differ as you move down to Texas has there been any rumblings or talk of that changing and just with all the – all the M&A activity that's happened down there, all the production that's going to come from the Southern Delaware. And again I know you guys are tied into to the Loving County plant you sold to EnLink. But I'm just curious you guys kind of thoughts on that if there's any kind of update on the flaring issues down in Texas.

Well. Ben I couldn't comment whether its having on raise or not, we're not drill in the Reeves County or those areas. That's been part of our planning was to try to put these plants. And so that when the wells are ready to produce, we were there ready with a part to bring through our own processing. And that's why it's worked out with most of our drilling out there. We just kind of that's one reason why we wanted to build up the midstream is in an integral part or the integral functions of Matador. So we learned having to deal with that flaring problem. That we observed in save the Eagle Ford, where there is a lot of flaring. And so we've avoided that to this point. The other thing that has helped is that we've done some pre-fab facilities that have been built outside and they brought onsite and that's had a dual advantage. One is its help produce flaring and made it ready to go and then second is there's been some big cost savings. Now we have in New Mexico submitted gas capture plants on many of our locations in recent wells and there hasn’t many hold up in the [indiscernible] any delays. And again I give credit to the staff for getting out there ahead of times and give these plans and requesting and not waiting to the last minute, so we know that, that's a particular hazard out there, but it hasn’t crypt is up, and I give credit to the staff for making their run – trying run on time and that as to that point.

Got it, got it. Appreciate that. And then kind of my next question has to do with on the disposal side obviously a lot of water coming off these wells in the Delaware. Can you just comment do you guys dispose of that now in the Arbuckle and as activity ramps out there. Is there any risk that could flack of better what kind of fill up and we have to start dispose of stuff in a deeper zones like the Ellenberger or something like that. Just again kind of curious on how you guys think through that over the next couple few years?

Yes, Ben, this is Matt and the answer in Arbuckle is no. I mean what we have the advantage we have in the basin for our salt water disposal wells is we're a long way from the basement and David can probably talk to this better than I can, but the zones were injecting into give us a lot of question if you will both above and below were able to dissipate that energy. And so we're very careful and there in his team they take a very close look at every one of the salt water disposal wells that we drill to make sure that they're in a good spot if you will. And then when we construct the wells I think it's not the question you asked, but I do want to point out that we do really salt water disposal wells there, they have drilled for very specific purpose to inject salt water. So the two wheelers are designed for that, to manage designed for that and so they're very – there's always some risk with there's very little mechanical risks related to those wellbores.

And I'm not just to add to that Ben that the we do where we can and we do recycle a lot of water and use a lot of recycled water too distracter wells both in Wolf and Rustler Breaks and of course that helps with the need to dispose as well.

Yes, yes. Now imagine that will obviously just become more of a more something you guys do over time as you build that out, but now that's really helpful guys. I appreciate it and congrats on a good quarter and all the work. Thank you.

Thank you, Ben.

Our next question is from Mike Breard with Hodges Capital. Your line is now open.

At the salt water drilling on the Eagle Ford, could you little background there, is it partly to bare more data in this case the buyer should happen to come around or is that's an area where you might consider it more drilling later on.

Mike, it's Matt and the five Eagle Ford wells that we've selected to drill were selected for a couple of reasons and probably the most important is that they are very economic wells. These are some of the five best wells that we have a new majority in that we will drill. So we're really excited about used to adding the production and getting a very nice rate of return on those wells. The other thing that these five wells do is hold acreage bores, so each of these five wells were from blocks that we had from explorations coming up, but the main drivers were given those wells were economic reasons.

Yes. So in the firstly everything now on the Eagle Ford in HBT and these wells had come out our drilling for example took a rig out of Patterson’s yard and together with the drilling development or drilling practices in the Eagle Ford on these horizontal wells drilled it in record time. First well out of the yard, so we're – first of all fully intended to make many of these will be some of the better wells that we have drilled in the Eagle Ford. And it also HBT gives us the option. And they are starting to be more activity. The Eagle Ford is starting to be revitalized. So we’re monitoring some of the re-fracs and some of the new zones that are down there at the Eagle Ford. And we’ll count late as prepare 2018 to see if we build upon this and see how these wells perform, but we feel very confident that as we announce results shareholders will be...

On the other things we're excited about when we just suspended drilling operations in Eagle Ford on June 7 of our completion is on. So we've learned a ton [ph] in the Delaware. When we moved out to the Delaware we had a ton [ph] and he gave us a head start to start completing wells out there. So coming back we're on June 8, I guess if you will. So we're especially coming back and putting a similar completion. So what we did on our or total book, which was very successful at Jackson Trust. So we're getting higher proppant volumes. We're getting closer cluster spacing, so we excited about how this new completion is going and the work force.

Okay thank you very much.

Thanks Mike.

Our next question is from Sameer Panjwani with TPH. Your line is now open.

Hi good morning. I was looking for some color on the Airstrip quality I didn’t really see an update in the press release. So just wanted to see how you guys are thinking about or not you have a longer-term data and if possible what the implications for the EUR could be.

Yes hi Sameer it’s David. So the Airstrip well was performing very well we are pleased the absolute had declined a little bit but we were encouraged by its early performance. Unfortunately we ran into some problems with the ESP on that well and that's one reason we hadn't talked more about it in this release was that it's currently down and we're working to actually pull and install a new ESP. So I just didn't as a result have a whole lot more to add. So I'm hoping that we'll get that back up and get that well back online and be able to look at it a little more closely and if so then we can update you on that the next quarter.

Okay, thank you.

This is Brad. Just to add to what David say on the ESP we have a saying around here well we serve the right to get smarter. So the production team is working on a new ESP design, we think it's going to be effective and at this point I just wanted to say the completion guys they've got a pretty huge task out there to figure out how to best execute artificial lift on these well. The Eagle Ford we were very successful with gas lift and that was our chosen method list for a very long time. And in the Delaware Basin we got a different set of hurdles, you've got the higher fluid volumes, you get up over 1,000 barrels a day conventional gas that doesn't necessarily work as well as an ESP well. So the production team has done a great job including the field guys of identifying which artificial lift method to put in these wells and then how to optimize and on each individual well. So it does take a little bit to figure out exactly what to do with regards to making a lot of progress.

Shamir I wanted commence you for picking our probably the one weak spot in our earnings release, is that this shows you we’re not perfect that we have mechanical risk on our advanced projects too. So I know for sure that you’re always read in the material stay in current.

Our next question is from Jeff Grampp from Northland Capital. Your line is now open.

Good morning guys thanks for taking the call.

Hi Jeff.

I’m curious it seems like you got some kind of back and forth on the well cost side working obviously service guys trying to claw back some margin but you guys highlighted a lot of internal kind of efficiencies and newer technologies you guys are integrating. So I guess just first want to clarify whether or not those efficiencies are kind of baked into your well cost assumptions or CapEx guidance and net-net how you see both of those kind of playing out? And them how well cost maybe move going forward?

Jeff I'll have first stab at it. Overall it's still in that 10% to 15% range it varies according to the function drilling completion production each phase of that, but we've been able to stay within the 10% to 15% overall because your drilling is a little faster. The production guys have done better on their LOE cost and unit of production. We've had some efficiencies there. So some have got a pressure pumping of course is one that’s been done the most. But still the group has delivered been able to stay within that 10% to 15% band. And Billy would you [Audio Dip] add anything to that?

No, I’d agree Joe [ph] we're keeping the cost down, it varies across the board there, the efficiencies have the continued to do better. The completions group is keeping the cost down, they’re doing a lot of multi well completions there. And with those things they are getting faster where started out with our zipper and mirror fracs we’re doing five wells or five stages a day, then went to 5.5 now we're well over six stages a day, so we're saving a lot of money there. On the drilling so the guys are working with Schlumberger and Smith Bits and looking at the new axe blade designs and stinger bits and we just keep setting new records in each section of the whole and in the last quarter we had several new records and we have several more to come just this week. We’ll be talking about next time. So we just keep getting better and expect more of the same.

Right that is your question Jeff.

No that's perfect, that’s for the sure. And great quarter guys.

Alright fine.

Thanks Jeff.

Thank you ladies and gentlemen. This ends the Q&A portion of this morning's conference call. I'd like to turn the call back over to management for any close remarks.

Yes before I conclude David wanted to follow-up on one of the questions.

Yes I just wanted to make one comment before we close out. And that was during the course of the call the land department, so you need to say that I should not quote acreage numbers because my memory may not always been as good. So the Jackson Trust numbers are more closer to 4,000 gross than 4,000 net. So I apologize for misspeaking on that. I just want to clear the up before the call was over.

Okay you all have uncovered our flaws. Mechanical flaws and now our memory flaws. At the same time I would like to close on this by just noting that this quarter has been very gratifying we consider it one of the best quarters we’ve had all things considered. But also that we've delivered some very consistent returns over the last couple of years and that we haven't had a miss going back quite a ways. I mean check with Bloomberg. But I think it compares favorably with other companies our size or our peers to deliver what I believe or at least eight straight quarters where we either may be exceeded the guidance. And I’m proud of the consistency that goes with mass statement about Matador proper growth at measured pace. And I want to thank the staff a few minutes. One story I want to tell is that few minutes before this began I asked the people in the room for show of hands that we have a lot of people sitting on this. And they were here when we went public. When we went public we had about 30 people, now we’re about 140 and we’ll ask more capabilities have been added these last few years by the people in this room. I wanted to thank you analysts out there, especially for you many kind remarks this time and for keeping this on our close. And we felt we had net earnings per share, SEC glimpses and what made the size. So we do look to hear your consensus efforts and save it with the – I feel like we build on both earnings per share and cash flow per share. And let’s now appreciate the efforts that you all make to get it right and to note that we must value this part of the process. And hope all of you will continue to come see us in person and meet this growing staff and some great young leaders and some great young professionals that have really good help in pushing on this rock and improve our consistency and improve our result. So with that I’ll sign off Matt let’s see if you have something else to say anybody around the table.

No thank you. Thanks you guys for your support and thank you for your comment to the question.

Our annual meeting is June 1, morning of June 1 is the Dallas Westin. And really if there is any of you that are interested to please attend. We have a lot of ways that shareholders should come and we have a pretty good time. So we’ll hope to see you there.

Ladies and gentlemen, thank you for your participation today. This concludes the program.