Good morning, ladies and gentlemen. Welcome to the Third Quarter 2022 Matador Resources Company Earnings Conference Call. My name is Justin and I'll be serving as 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 for one year, as discussed in the company's earning press release issued yesterday. I would now like to turn the call over to Mr. Mac Schmitz, Vice President, Investor relations for Matador. Mr. Schmitz, you may begin.

Thank you, Justin. Good morning, everyone, and thank you for joining us for Matador's third quarter 2022 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 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. Additionally, 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, I would like to remind everyone on the call that you can find a slide presentation in connection with the third quarter 2022 earnings release under their Investor Relations tab on our 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. As we begin this call, we're very excited about the way this year has developed. We're looking forward to finishing it off during the fourth quarter and have full year results, but everything to this point has been working for us. And as you can see through the year that we've made a real effort to improve the fixed dividend and to reduce debt and to increase production reserves and increase the value and contribution of our midstream assets and we feel we've made improvement in all areas and appreciate your interest and support. Notably, just kind of put a couple of numbers in perspective, we went public a little over 10 years ago and we have more cash on the balance sheet today than was the whole market value of Matador at that time. We also have more cash on the balance sheet than first Matador sold for. So the improvement has come from a lot of people pushing on the rock, great work and support by our board in helping us make decisions, great decision making among the staff here in a lot of individual ways out there in the field and we think our forward outlook is positive and we tend to continue to grow as we say, profit growth at a measured pace. And with that Mac, I'm open for questions.

Great, Justin, we'll start with some questions.

[Operator instructions] And our first question comes from Scott Hanold from RBC Capital Markets. Your line is now open.

Thanks. Good morning and congrats on the quarter. My first question is, actually going to be directly referring to the comment you made Joe about that cash balance you have, it is growing and it looks like you've got a pretty good trajectory of potentially even building that through next year. So like when you -- how do you think about the best ways to use that cash? Where do you feel comfortable with that position and how you want to allocate it going forward? And I guess notably, if I'm just going to add in a little tail to this, it looks like you did a little bit of acquisition activity in the quarter, if you had some color on that as well.

Alright, thank you Scott. It's a good question. And we're in the process of thinking about the different alternatives that we have and different options that we have with that kind of opportunity that cash provides. And as we tend not to do targets. What we like to do is think in terms of opportunities and playing not only for the immediate opportunity, but for the long term opportunity. And the nice thing, is when you're in turbulent times, like as you are now having cash will assure that you'll get through if prices fall it'll have opportunities because drilling costs and operating costs are lower, more acquisition opportunities. And if they should stabilize and be consistent, then you have generally some more acquisition opportunities or and then you look at your number of A-plus locations and we've got plenty of A-plus locations. Well somewhere between 10 years and 20 years and at the same time, you don't -- we can do those, but we want to do them at the most opportune time. And so we would like to see consistent oil and gas prices. Waha [ph] has been mentioned and we may -- someone may have a question turning Navy on a part of it. And so if those are things that might happen, then you look towards getting you fixed takeaways -- firm takeaways from the basin and other bills. So it isn't one decision game, prices are low, prices are high, and the money is a resource and you don't want to spend it all at once. You want to keep some dry powder for the changes. We have a business that changes very rapidly from high prices to low prices and recent years and supply chain problems and environmental problems. So keeping that cash gives…

Scott, this is Billy Goodwin and Dr. Frost down the table from me here has some ideas of what we could do with that free cash flow.

Yeah, we hey, Ned [ph] is geologist, let me put that.

We always have ideas on what to do with excess cash, but, I think to kind of reiterate what Joe said is there's a lot of good options in front of Matador, and I think these options are definitely all sustainable through a wide range of commodity prices. But, I know we're just kind of adding color on the topic that you asked about. But, Matador is really I think across this year come into a really good position of developing new acreage, adding value through testing new zones and really optimizing our operations to run efficiently in this environment, but a lot of good stuff going on.

Hey Scott, this is Bill again. I noticed that Ned was having to add some horsepower to the department there because of all the different targets and zones we have to look at now. He has to get more people because there's so many -- so much A-plus rock, for the geologists to be able to look at all of it. So, it's really exciting times right now.

Well, and you asked a question I didn't fully answer about the acquisition this past quarter. That's an example. It's another bolt-on transaction in an area where we're active and have been drilling. And so there's, the risk is much less because we are in those properties and was just an add-on and we'd like to do more of those as the opportunities present themselves. And Ned's done a great job of building up the geoscience group, just as Billy has built up our operations group and then the way they work together has been real, very seamless. So good job to all the staff.

All right. No, I appreciate all that color and hopefully we just have to worry about the plan A and plan B in the higher the medium product, commodity price environment. But Joe, you did actually did also make a point on something I was going to ask and obviously it's become a little bit more prominent and visible in the last few days with Waha going negative yesterday. I think some of that is just, we'll call it transitory because of some pipeline maintenance, but we're also seeing Permian gas growth as well. But, one of the pipelines that is going down for maintenance is GCX, which you all have firm on. Can you give us a sense of how that's impacting your operations and what that means in terms of like production. Do you need to -- do wells need to be shut in? I don't think a lot of people want to flare at this point, but can you give us a little color on what that means specifically for you?

Oh, right Scott, I'll give it a try and Glen or Greg or somebody can jump in to do a follow up, but first it's a four-day deal. So it's not going to be especially material. The second we had planned ahead for this even during the summer that you knew there was likely to be some maintenance work and we worked around it so that some of our production will be reduced, some of the price we're going to get during that four-day period will be reduced. But I still think we are confident we will still taking the steps that we did on a weighted average basis. We'll still be getting somewhere between $2 and $3 for the gas. So it's not disabling just a little more work on our marketing group and a little more work for Glenn. And we don't have plans to flare. We're pretty proud that on our emissions, we've gotten our admissions down to less than one half of 1% or in there thereabouts. So we don't want to spoil that record. So Glenn, what you want to add?

Yeah, Joe you nailed it. This is Scott, this is Glenn Stetson said. And so yeah, I commend our marketing team years back to get that firm on GCX, which has helped us, reduce our exposure to Waha pricing. As Joe mentioned for the four days, we'll see a bit of a lower price just for those four days and the marketing team, know going into the shoulder month did a good job of selling gas at a fixed monthly price. And so has also helped in that regard and as to the future, we're always in contact with marketing for 2023, if you see that tightening in the market, there are ways similar to getting selling gas on that fixed price. There are other ways to help mitigate that Waha differential.

And our next question comes from Neal Dingmann from Truist Securities. Your line is now open

Another great quarter and Joe, your wife's probably happy with that increased dividend. It's nice to see out there on the base dividend. But, my question -- my question's going to be on the op side, Joe, you guys continue to do fantastic work with when I was on the road, the guys talked about all 11 zones that they're having success. I know you don't have a 23 plan yet, but can you give ideas, will the focus continue you think to be around the six, seven rigs and would it be in some of those same areas around the Rodney Robbins and Russell, or do you have any idea what you could give yet on early '23?

Yeah, we we're going to be working a lot of those same areas that are working well for us. We're finding new zones as we -- as Ned and Billy talked about Tom and his teams, he's got six teams. They all have good ideas. They'll be more the same plus trying to work in some new Tom, do you want to elaborate?

Yeah, I think Joe, I think that's right. And Neil, we're going to have -- we've got eight new Rodney Robbins as we've talked about expected to come online sometime in the late Q1, early kind of Q2, part of part of next year. We'll be spreading the ball around. I think that as Ned mentioned, they've got a lot of great ideas all around the basin and particularly in the northern part of the Delaware basin, you're seeing us and other good operators out there trying all sorts of different new targets. And so Stateline will be in the mix as well. We still got a lot of wood to chop and as Joe mentioned optionality is something that we really put a big emphasis on here. So we're very excited for the future, but we look forward to announcing our plans early next year.

Yeah, look forward to all the activity. Go ahead Joe. I'm sorry.

Yeah, Neil, I'd just say the other big factor that goes into it is just kind of looking what commodity price is and what the costs are, but our best guess is they're going to be about like what they are now. We don't expect radical change at this point, and it seems to be stabilizing. So I hope that pertains because we can make money at this $80 oil and these costs while going up. We're finding ways to mitigate and our marketing group, for example, taking the fixed prices during the summer worked so that when this situation came up on maintenance, we've been able to mitigate the impact and make it minimal compared to where it was. So, I think the outlook is still very positive and we will like our chances.

Yes sir, I would really like you all stay with the steady growth program versus others that have no growth. My last question just maybe Joe for Mike or one of the guys, you got the upgrade I think in September on from Moody's and the agencies. Inching closer certainly appears like you guys should be, to me, investment grade, any if you want to comment on that, I think you're certainly getting close to there, again, look your financial speak for themselves, operations speak for themselves. I'm just wondering, what you guys think about getting to or how soon maybe to investment grade?

Well, Neil, if it was up to me, of course we've be -- we'd be there tomorrow, but the way the agencies complain to us, it doesn't make I know they've got the rationale, but they put an emphasis on size and that if we were 200,000 barrels a day, we'd be a better candidate than at a 100,000, even if our leverage ratio was 0.2 as it is now or 0.1 and there's is a two point. And so they pay more attention the size seem to, than they do the actual strength of the balance sheet. So, and they -- it's a little arbitrary. They're the umpire in that situation and it doesn't do much good to question them too much. They're going to do things on their own pace. But we were real pleased that Moody's, who's the most conservative, was the very first of greatest and I think we'll get -- we think we're good candidates for further upgrades this next year if we keep doing what we're doing.

Yeah. And Neal, this is Michael Frenzel, EVP and Treasurer. I want to pile onto what Joe said. I think we were really very pleased to get the upgrades that we got. The rating agencies do focus on size. However, they really emphasized to us in our discussions how much the work that Matador has done improving and really strengthening the balance sheet mattered in the cases that they made to their credit committees. And also the track record that Matador has shown in the financial prudence and focus on continuing to drive value and those factors really weighed well in Matador's corner. It was great to see that they considered those because we probably are a little bit small relative to our rating, but I think the track record really shown through there.

And our next question comes from Slate DeMuth from KeyBanc Capital. Your line is now open.

Good morning guys. This is Tim Revan [ph] from Key. Appreciate the time. Joe, I wanted to follow up on your comments on San Mateo in the quarter. So record revenue there. I know Pronto was a driver of that. We look at the $400 million in cash on the balance sheet and know there's a lot of options for it. But can you talk about how big the opportunity set is for midstream in the Delaware on M&A and really how big your appetite is to kind of increase your presence?

Well again, Tim, it's a great question that we talk about virtually every day here. What we try to avoid is a target. And because when you get into targets, you sometimes will overpay on a target. But if you just look at the opportunity and be patient opportunities will come along. So we don't go into the year. Brian Willy's done a great job and Greg Craig and others Matt Spicer saying we're going to buy $300 million worth of midstream or something. We just look for opportunities, see where we're drilling wells, so that we can provide some of the anchor tenant aspects of it, ensure the profitability of it, as well as to see where there in modern or I'd say recent pipelines put in when we first came out to the per the infrastructure was old and it was leaky and needed to be replaced. A lot of it's already been replaced, but we still look for areas where there aren't people and consider adding there as well as adding where we're doing most of our drilling. We see those opportunities are good, but we also look at the drilling opportunities we have or other act, it's all one big opportunity box and we meet as a group and talk about them, and we don't -- we're not trying to, no one's an empire builder and that's what makes it work. And everybody's looking to see what's best for Matador. And the same way on our board is that there's if you could be in this room as we prepare for this, you'd see that everybody's here together, as Billy likes to say, better together and we'll do it whatever way is best for the shareholders. Billy? Billy's our president, make that clear.

Yes, sir. There's a lot of options. President, operations, and we do -- we have lots of opportunities. And on the midstream side, there's different things going on all the time in the different parts of the basin where we're operating and things to look at and like Joe said, keeping that dry powder ready, we weigh that against all the other things we're looking at. So it just, exciting time and everybody's staying after it. So we keep winning the game, but see a few more smiles now.

Okay. I appreciate that color and we'll stay tuned on that front. One more question related to cash again, that $400 million is a big number on the balance sheet. You've quadrupled the dividend in recent quarters, but to be frank, this is a high class problem with the share price, doing what it's doing, your yield is really not meaningful at this moment relative to a lot of peers. So do you think at some point, as the company matures, there's a yield more in line with the SMP500 or how do you think about that dividend right now given it is sort of de minimus, relative to peers?

Well, Tim, one thing that's different about us and a lot of companies is that our staff owns a lot of shares. We're all big shareholders, all of our VPs, I am, our board are all large shareholders. So we like dividends. Make no mistake is that not many send back their checks that they all seem happy to cash them. And we believe, we think the dividends are the fairest way for a company to reward its shareholders and pay back that cash because everybody is treated the same based on the shares they own. We can't think of a fairer way to do that if you buy back. It just -- that's a small part of your shareholder group that really benefits directly from that. So we like share we like that. We also want to dividend that we are looking long term that'll hopefully increase year-to-year and be one of those companies that's recognized is having a sustainable dividend that goes up a little bit every year and we're still feeling our way and we hope that prices and cost and results will enable us to comfortably increase the dividend next year sometime. I don't want anybody think I'm guaranteeing it but look as things stay right now as they are with $80 oil cost in a livable range all the areas working good. I'm hopeful that we could do that and I look at other companies and we're observers and if it works out that one of the methods that they're doing the is sustainable and the public likes that. We'll look at that. We always reserve the right to get smarter, but we think at present, the fixed dividend is what's the fairest to do? And it's better to be slow, but sure and that's the feeling of our shareholder group. And if you look at the vote that we had at the Annual Meeting, they clearly were very happy with the way things were going and you're in a volatile business and so we want to be, again, it's better to be slow, but sure. Better be a tortoise and a hair on some of these return to shareholder matters. And first Matador always pay the dividend and we are glad to be at that inflection point where we could start paying it and then build it up now each year that we've been paying it and would like to continue to do so for many years to come.

Okay. Yeah, that all makes sense. I think the simple base dividend is going to be the long term winner. So I appreciate your comments on that. Thanks everybody.

And our next question comes from Zach Parham from JPMorgan. Your line is not open.

Hey guys, thanks for taking my question. I guess first one on the quarter, you all reported pretty minimal cash taxes during 3Q. In the first half you were around 6% and we had expected that level of cash taxes to kind of continue through the year. Can you just give us some color on that 3Q number? Was that just timing related? And maybe how do you expect cash taxes to trend at 4Q and end of '23?

Hey Zach, this is Rob Macalik, Chief Accounting Officer. So you're right. Q3 current tax expense was really close to zero and it was really for two reasons. The decrease in the strip price from June 30 to September 30 and also some tax planning and other strategies that our teams worked really hard on. It basically reduced our expectations for taxes for the year to around $75 million. We expect Q4 cash taxes, therefore to be about $20 million or so. But my team's working really hard. We're working with the outside advisors, making sure that we're doing the right thing, making sure we get it right, pay our fair share of taxes and that's really been our focus.

Got it. And then any color on how cash access can trim in '23?

Well, we're looking at that. It is very dependent upon just the amount of CapEx and the amount of income that we have. So, as we go into February, we'll continue to look at that, but we definitely at this point are looking at somewhere in the neighborhood of under 10% of cash taxes for next year as well.

It's Zach, it's a high class problem to start paying taxes now, but I think our guys have really worked hard to make sure they get it, they get it right and that it's the same way on our audit is we try to make sure we do it right so that if we're audited, all the numbers will check out. That's my instructions to them. Whatever you do, make sure it's right because I don't want to be arguing that we haven't done that and that applies. We've been audited a number of times on state taxation and we've always had generally a queen bill of health.

Got it. Certainly a high class problem. And then I guess just one follow up on Scott's question, earlier on the acquisition, were there any production volumes associated with that acquisition?

Yeah, this is this is Tom Elsener. We're always looking at bolt-on purchases. Our teams do a great job working with land and geology and accounting to put that together. Those probably a little bit, I think Michael May know the kind of exact number, but most of these deals have a little bit of production associated with them, but not a ton.

That's right. This is Michael. Yes, there was a little bit, but we had factored that in when we gave our guidance in the last quarter, we were anticipating that transaction.

Thank you. And one moment for our next question. And our next question comes from Leo Mariani from MKM Partners. Your line is now open.

Hey guys, why don't you follow up a little bit more on your exposure to Waha. I know you do have some firm on Gulf Coast Express, but when you look at kind of where the production is today on the gas side, do you guys offer us like a rough percentage? Do you guys feel like you're 70% exposed to Waha? Any number you can kind of throw out there that might help us? And then you also kind of alluded to the fact that you might be looking at some additional firm. I know that some of these pipes had done some open seasons and offered more firm that's going to come on in the fourth quarter of '23. Did you guys elect to take any more firm and maybe just in general, just talk about your strategy for mitigating what could be some sloppy Waha prices in '23?

Yeah. Hey, this is Glenn again. Yeah, I think, just as I said before, we're always evaluating it. And it certainly depends again, to give you that answer. But what volumes are moving through San Mateo's facility what third party volumes and then what the amount of volumes that are being produced out of the base and it really just depends. And so, again we have the $115 million on GCX, and then the remainder of all those volumes, has the potential to, is exposed to Waha, but we have, the pricing structures that can be both fixed and variable. So, yes.

Yeah. So this is Greg Krug EVP of Marketing. As far as what Glen has said, that is correct as far as the GCX piece. We also have seasonality transport on Southern Cow to SoCal. So, it's -- we do have exposure to, to the Waha, but there are ways of mitigating that, and that's kind of what we have already did, like last summer, for instance, as far as selling our gas on a fixed basis based on the Houston Ship Channel. And that allows, that allows for us to kind of pinpoint timing a little better than going out and actually taking on a transport deal that you may be committed to for 15 years, 20 years. So those are all things that, that we have to look at each time that one of those deals come up as far as the transport opportunities.

Okay. So just to be clear on that, it sounds like you guys did not have left to take any new firm on some of the pipes that are coming on the fourth quarter of '23.

No, We did not. We did not. Okay. So,

All right. And just shifting gears a little bit many of you folks can talk a little bit more about your bond buyback program here recently. Obviously you've bought back quite a bit of those bonds looks like you did about $7 million bucks so far in October. Can you kind of just speak to what your appetite is to buy more of those? And you think there's bonds available to take kind of another meaningful dent in that debt number at this point? You think it's going to be just kind of little tiny pieces around the edges sort of going forward

Now, Leo, we'll be opportunistic like we were this year, is that, we set a goal of, that what we might be willing to do, we had to disclose that goal as we were buying in the open market. And we reach that and we're looking at sudden, entering the open market again. And on the buying opportunities, we're in all probability with a high probability we'll keep some debt on the books. So the rating agencies know that we're handling the debt and in a professional manner. And but if the bond prices fall much below par we're likely to buy some, because that has the advantages when we buy them. We increase our cash flow because we don't, we say the interest expense and we save money on the ultimate redemption of the bonds and allows us to continue to have bond partners that get to know us and develop confidence in us. And we found that we sent the bonds out. People who bought bonds came to buy the stock, and people who own the stock came to buy the bonds because that mutual trust and confidence. So we think we'll keep our toe in the water and continue to have some bonds. On the other hand we under the appropriate conditions, we would redeem more bonds now. And very pleased with the way things work. We provided liquidity to some of our bond holders who during the year needed it. And I think that was just a win-win situation. And we'll try to continue to build a relation with our bond holders as well as our shareholders. So whatever we can do in that regard we want to keep up the good feelings we think we've built up already.

Okay. I appreciate that response. And I guess just one last one here for me. What is Matador's kind of appetite to look at, slightly larger m and deals is there anything out there that's kind of in the several hundreds of millions? Just noticed recently, a lot of the deals you guys done have been, really small. So just curious on is there availability of anything a little bit bigger on the packages out there? And as an appetite for that, do you think you can kind of continue to put up, $50 million, $60 million, $70 million of kind of small deals, every other quarter or something?

Well, yeah, we've done big deals, proportionate to our size. For example, the BLM deal, we spent about $400 million buying those BLM leases for which the market treated us pretty roughly. But now that when I, we've drilled 54 wells on state line and had the results that we have, nobody's saying we didn't do right. But when we spent that $400 million, that was a very big percentage of our then market value. So we're, we're not restricted to just buying $60 million or a $100 million dollar deals. We find those have the least risk if they're in our operational areas. It's hard to find deals that have a concentration like that. And, that u usually a bigger company when they're selling, they put in it's not all choice acreage. So we, we like the selectivity of going for these tracks that are ad joining. Our, operations are in the center of it, and we, because we have reduced risk and can neatly incorporate them or trades are the like, but we if and we've bid on some bigger deals but again, we've tried to be cautious and appreciate the inflection point that we have of staying outta debt. If you go into debt when prices are high up here at $80 million or $90 million and it's volatile, you're taking on a lot of risk. We're growing double digit growth right now without taking those risks. And so we're creating a lot of value or adding value to Matador without the risk. If there comes a time that we make a larger acquisition whose risk factors are no more than what we currently have, hey, we're, we'll go for it. But it's a risk and opportunity, but we want it to fit into our drilling program. So we don't want to buy some in Wyoming, even if it's at a good price. It needs to be in our operational area. We need to be able to integrate it. We need to be able to incorporate it into our drilling plans and program. So the size of the deal doesn't really bother us unless we got to go into debt. And we'll do that just as we did in the build end deal if the price is big enough, but don't want to take a lot of chances for very average growth. We want to emphasize the quality of the deal has more effect on our willingness to go after bigger deals. You want the overall quality to be very high. It's easier to compress that quality in the smaller deal, but we play a straight game here and we'll go for a bigger deal if the quality is there and it fits our own properties fits in well and with our operating plants. And so if anybody's got a really good deal out there, we wish they'd come see us.

All right. That was a very thorough answer. I really appreciate that, Joe. Thank you.

Well, thanks, Leo. I'm, again, I didn't mean to tell you how to build a watch, but we give thought to that every day how do we grow in the most value creating way.

And our next question comes from John Freeman from Raymond James. Your line is now open.

I realize you all are still working through the 2023 plan. Just sort of given the, the tightness and the oil service side of things, the, the supply chain issues that, everybody's dealing with globally, especially with steel, it just, it seems like you, you'd probably have to lock in a lot of those are secure, a lot of those services and kind of ancillary services and equipment sooner than maybe in years past. Can you just give some sense of kind of how you all go about that? Do you have a certain base level of activity that's already sort of locked in, in terms of all the necessary equipment, etcetera? Just maybe how you all go about that process and where you, where you stand today versus maybe where you would've stood in in years past from going through that process?

Yeah, Hi John. This is Chris Calvert, Co SVP of operations. It really starts with planning and really kind of liking the plan that we have, the seven rigs that we have, and then working with our vendors that we've had for, 40 years since, since Matador in one form or the other has been in business. And on the drilling side, we're happy with the seven rigs that we have, both performance and staffing on the drilling side with the seven rigs that we do have with results to steel, with regards to steel, it's another one of those 40 year relationships that we've cultivated and built upon in that history and it comes down to transparency with that service provider and, and the trust that we have with them and that they have with us that, that we are going to say, well, we're do, and to them as well. And from a logistics standpoint, we have had no, operational downtime, so to speak, due to any supply chain constraint, whether it's sand, steel, or fuel. On the sand side it's working with service providers such as Universal and Halliburton, which we've been happy with making sure that we have sand on location. And as far as securing these services into, the fourth quarter of this year into 2023, on, on the casing side, we have casing with Matador's name on it. On the sand side, it's working with those service providers and giving them, giving them line of sight into our activity and into our plan with our seven rigs and the amount of frack fleets that that will be. And so we're confident, once again, we're confident in our position operationally to execute on the plan that we have and that we've set forward and into 2023. We're confident in what we have. Obviously regardless of where price goes, we're going to continue to operate at a high level and kind of push forward the plan that we have set forward.

Thanks, Chris. I appreciate that. And then just my follow up question obviously in years pass, when you all enter a year, you all typically been more like 35%, 40% hedge and Cam's hedging, philosophy's been kind of protect the balance sheet. But just given that you all are basically at roughly zero leverage almost at this point, should we just assume that kind of going forward, that the hedging strategy, I just expect you all to be a lot less hedged than you would've been in in years past going forward, just given the strength of the balance sheet. And then how much does maybe the backwardated curve also play into that?

John, that's a good question. Most, I've always been of the philosophy or our philosophy's been grounded in the notion that you hedge when you need to protect yourself on your debt so that you don't get crosswise with prices really coming down and having a lot of debt. So when you have debt, you need a certain amount of hedge protection, so you're not at risk of your debt tripping you up or the banks calling in things. So we've always tried to maintain that. And we have, we've never been in a situation each time on our debt with our bank group. We have had a great bank group and they've always renewed our credit generally without any change and have never cut us back. And I think hedging played one part in that. Now we don't have debt, we don't have to do it that region. There's still opportunities where you won a hedge, which in effect is what Greg did last summer to. So we were selling on a fixed price and not subject to problems at Waha. I thought that was a very clever stratum that Greg and Anton and his group had. So, there's sometimes reasons and we will too different facets of our business, we'll hedge him one way or another. There's lots of different ways to do it other than just buy and afford contract. But it is an added cost and if you don't need it, you shouldn't do it, but you do it to protect yourself, either that you won't go native on price as we did is why we did it on that this summer in the, in the fixed price scenario. So it's a useful tool. We'll use it. We won't, use it just as a reflex or…

Thanks guys. I appreciate the answers.

And thank you. And I am showing no further questions. I would now like to turn the call back over to Joe for closing remarks.

Thank you. Would want to thank you all again for your time, listening in your notes? And one, once again, extend the invitation to come see us and we'll have breakfast or lunch or dinner and have more substantive discussions on whatever you all want to talk about. And we want to develop the same kind of relationships with you that we have with, with our various vendors and supply chain. And we, part of our aim is to continue to be fairly transparent in what we're doing and so we want invite all the shareholders and not just analysts to come in and see us sometime and just appreciate these 10 years that. I hope that we've gotten better on these calls. I'm not sure I'm more succinct than I ever was, but we, the real important point is this is a team effort and that everybody's contributing and make the train run on time. And is this is what we think it takes and to meet new challenges like the ESG and but we appreciate your questions. We think you all make us better and sharper that each quarter that we got to meet with you all. So please know, we appreciate you all and want to invite you. You're always welcome here. And thanks to all the staff for pitching in and getting us ready here and for their hard work and planning and that's a big part. We think of why the years worked out. We weren't reacting at the last minute, but the planning effort was done months ahead of time. And you feel good when it, when, when a circumstance comes up and you planned for it and you were ready. And I think the gas at Waha is an example of that. It's effect on us is minimal. We're kind of prepared for it and I think they handle it in a very professional way and, and hope that you all get a sense that of the planning on that and on the taxes and other areas, new ground that we're experiencing at this time that our groups thought about and supply chain everything else they started on that long, give a lot of credit to our board and staff for being prepared. Thanks everybody.

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