Matador Resources Co (MTDR 2.10%)
Q3 2018 Earnings Conference Call
Nov. 01, 2018, 10:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good morning, ladies and gentlemen. Welcome to the Third Quarter 2018 Matador Resources Company Earnings Conference Call. My name is Daniel, and I'll 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 December 31, 2018 as discussed in the company's earnings press release, issued yesterday.
I will now turn the call over to Mr. Mac Schmitz, Capital Markets Coordinator for Matador. Mr. Schmitz, you may proceed.
Mac Schmitz -- Capital Markets Coordinator
Thank you, Daniel. Good morning everyone and thank you for joining us for Matador's third quarter 2018 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 to 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'd like to remind everyone that you can find a short slide presentation summarizing the highlights of our third quarter 2018 earnings press release on our website on the Events and Presentations page under the Investor Relations tab.
And with that, I would now like to turn the call over to Mr. Joe Foran, our Chairman and CEO. Joe?
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Thank you, Mac, and good morning to everyone on the line, and thank you for participating in today's call. We appreciate your time and interest in Matador very much.
Now I'd like to introduce the executive committee, who is joining me this morning along with other members of our management team and senior staff who are standing by for all your questions. They are Matt Hairford, President; David Lancaster, Executive Vice President and Chief Financial Officer; Craig Adams, Executive Vice President, Land, Legal and Administration; Billy Goodwin, Executive Vice President and Head of Operations; Van Singleton, Executive Vice President of Land; Brad Robinson, Executive Vice President, Reservoir Engineering and Chief Technology Officer.
As outlined in our earnings release issued yesterday, the third quarter of 2018 was an outstanding and record quarter for us, which exceeded our original projections. I want to take a moment and acknowledge the entire Matador staff for all their achievements, and to note some groups in particular that really went above and beyond. First is midstream and marketing, they've made a number of decisions on marketing, including fractionation and hedges, which have mitigated much of the differentials and transportation problems and really appreciate what they've accomplished.
And the goals that they set, some ambitious goals in securing third-party contracts for some of our midstream facilities. They brought their plan, doubled the capacity of our Rustler Breaks plant on time, on budget, got the substation going, got the aiming plant and have turned in a -- just a great performance. Also to our normal E&P new zones, reduced cost on drilling, some innovations and completions that have made a difference, some great land work, the whole group, I want to commend.
Also, I don't want to leave out what has been a very busy quarter for our financial group. They redid the bank agreement. They refinanced the bonds, they added to the bonds. They've got the agreement in place for our midstream, and they just were relentless in getting all this done and as we care around the office when we shout, awooga, awooga goes off, they just get to work.
And finally, our guys in the field, who have kept up after the production to help us achieve these production results, and theyfought through rain, truck traffics, demand for services of getting them out there to the wells, and we wouldn't have had this kind of record quarter, if those guys hadn't given 110% throughout the period. And so it's been a total team effort and I wouldn't feel right without mentioning them. And also I want to thank the analysts today for their many kind words, but want to reassure all of you, we're not letting up a bit on working hard to keep up this momentum.
So let me turn it back to Daniel, and the questions.
Questions and Answers:
Operator
Thank you. (Operator Instructions) Our first question is from Scott Hanold with RBC Capital Markets. Your line is now open.
Scott Hanold -- RBC Capital Markets -- Analyst
Thanks. Good morning guys.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Good morning, Scott.
Scott Hanold -- RBC Capital Markets -- Analyst
Joe, you're talking about sort of the midstream assets and how that's progressing pretty nicely, and I think in your press release you talked about the gas processing plant being over 80% full with your recent contracts. Can you talk about where you want to take sort of the midstream asset in 2019 like, where are your -- where do you really see the big opportunities to kind of further development, when you look at across your acreage position?
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Well, Scott, that's ongoing question that we talk about nearly every day. Where do we want to go with this, and what seems obvious to me is that we'll be close to capacity. So now you look at the feasibility of where you want to extend the reach of your gathering lines for water, oil and gas.
And the first thing is locating probably some additional saltwater disposal wells in areas where you're going to have production, and the most likely candidates there are some of the BLM acreage that we acquired, as well as our work to the north, which we think is unreserved up there in the Northern Delaware and we are encouraged by our continuing movement, north in the kind of results that we're getting there, we feel are steadily improving. And so those areas makes sense to begin with saltwater disposal, follow-up with potentially pipelines to gather the gas and bringing it into the central processing station.
And the third area is in the oil and further developing our strategic agreement with Plains, so that in the future, you will have more options on what markets you want to take to your oil. So kind of layering that in in kind of that fashion, Matt or Gregg, would you add anything to that?
Matt Hairford -- President
Yes, Joe. I think you said it well out. To me Scott, what I think is really important is the success that the midstream team has had thus far with the plant being at 80% that you mentioned, we've got six saltwater disposal wells that will be drilled at Rustler Breaks. We've got three down in Wolf. And just what that does for us, I think, it gets the foundation where as you continue to add things like Joe said, you add the sixth well for Rustler Breaks here at the end of this year. You're able to add an amine treater at the plant, you're able to get additional compression where you can build on these things and it really takes the risk out of the midstream business as you track things on. As you get bigger and bigger, adding another saltwater disposal well is not that big a deal and you're easily adding that when you got committed volumes going forward. So the team has done a great job and I think the opportunity based analysis is what we're going to continue to look at and just make sure that we're doing the right thing for both San Mateo and for Matador.
Scott Hanold -- RBC Capital Markets -- Analyst
Understood, thanks. And as my follow-up, you also talked about production in 4Q being a little bit more flat, and it looks like that maybe as a result of some drilling by some nearby producing wells with new ones. Can you give us some sense of what that impact for the quarter could be and is this something that -- how do we kind of look at this as we go through '19. Is it going to happen most quarters, but is there a point in time when like in 4Q, it looks like it might be a little bit more?
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Yes. Hi, Scott, it's David. I think it just happens that this quarter it just seems like it's a little bit higher than most, I mean it happens all the time. I mean we have well shut in from time-to-time, but I think that this quarter was just -- was, looked like it was going to be just a little bit higher. If we're able to get through some of those -- some of those completions a little more quickly, get the wells back online, which is what we always strive to do, then things might be a little better. But, I just felt like looking -- we felt like looking at the forecast that was -- it was just worth mentioning at this time. And sometimes it's not only our wells that we're completing and maybe offsetting wells from other operators that are getting completed that causes the need to shut in some of our recent completions too. So it is just one of those things that kind of stuck out a little bit this quarter, and that's why we mentioned it, but it always happens.
Scott Hanold -- RBC Capital Markets -- Analyst
Okay. Appreciate that. Thank you.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Thank you, Scott.
Operator
Thank you.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Before we go to the next question, I would like just to note the leaders of our Marketing and Midstream Group, Gregg and Matt, they've formed a great team together. And where Gregg primarily does the planning and Matt does the execution. And you can see the results and I want to thank them for their planning and their work with us on the executive committee on making sure it all rolls out smoothly. And the operational effect that they've had and that we’re flaring less than 1% of our gas production, because when we've been ready to turn the wells on, the coordination between them and production, they're waiting with the pipeline when production is ready to handover. So I don't want to admit, they're not just smart guys, they are hardworking guys.
Operator
Thank you. And our next question comes from Tim Rezvan of Oppenheimer. Your line is now open.
Timothy Rezvan -- Oppenheimer -- Analyst
Hi, good morning folks. Thank you for taking my question. I'd like to start first on the balance sheet. I noticed that leverage has kind of ticked up a bit. I think people expected that with the acquisitions. You're now at about two times, which is kind of the highest level since 2016. And organic deleveraging is -- I think most people see it as sort of modest in the next year. How are you thinking about leverage and kind of managing that given commodity price volatility?
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Tim, I may start off and then ask David about clean up. But first, we're going at this deleveraging that balance sheet kind of like we do land, just at a break at a time. We've made a number of transactions that have -- renewed emphasis after the BLM and we've already retired some (inaudible) in the neighborhood of $15 million. That doesn’t sound like that much, but a break at a time, making a deal on this property or that property. And we are still open for, if we receive a serious offer on our Haynesville or Eagle Ford, we will give it serious consideration, whether it's for a tract or (inaudible) wide or for the whole thing. In the same way we're nibbling around the acreage in doing trades out in the Delaware. We're collecting -- being careful about collecting our accounts receivable. All those little things and it’s added up. So in the -- say over the last month, picking up $15 million here breaking of time and we'll continue to do that.
We also see -- you saw a big jump in our EBITDA this year from last year. And we're pretty pleased with that trend. The E&P is working out pretty well for us. So we're keeping an eye on it for sure, but we are also continuing to address the matter, and hope to provide you with further improvement as the year goes along and into 2019. David?
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Yes, Joe, I think you summarized it well. I think that where we finished the quarter at about 2.0 which I don't think is concerning. It is a little bit higher than we might have averaged, and I think Tim correctly pointed out that it's the highest since the early part of 2016. But we've always tried to keep things around that level, and as we look into next year, we don't -- it may not go down that much, but don't expect it to go up very much either. So I think it will stay fairly constant, we believe as we go through the next year, absent any kind of significant downturn in commodity prices. And even at that, I don't think we feel like it would be at an level where there would be any alarm.
We certainly maintain, as Joe says, the ability to monetize some of our non-core assets and I think we never entirely take the need for to -- if we need to issue equity down the road, we can, that's just not something we chose to do this time, but it's something we certainly can consider. We've also begun to put in some nicer hedges for 2019 and will continue to try to do that to protect the cash flows as well. So I hope that helps.
Timothy Rezvan -- Oppenheimer -- Analyst
Yes, that does. It does. I appreciate the context there. And if I could have a follow-up and change topics back to San Mateo. In your Analyst Day earlier this year, you gave some kind of EBITDA parameters for the segment, $65 million to $75 million, and I know there is a big ramp quarter-to-quarter. Can you talk about kind of where you stand year-to-date on sort of the high case of $75 million versus your base case, and specifically kind of the -- you had talked about maybe a 4Q high case segment EBITDA of about $25 million, setting the stage for 2019. So just any color on how that EBITDA ramp is going at San Mateo. Thanks.
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Yes, sure. Well, first of all, I think we believe the EBITDA ramp is going very well. I'm pretty sure, I'm correct that the EBITDA number for San Mateo was around $17 million, maybe just a little above that in the third quarter. And so we're certainly headed in the right direction. I think that we will be close to the $25 million in the fourth quarter. I'm not sure if we'll quite get there, but I think we'll be in spitting distance of it. And if we don't get there in Q4, we'll get there in Q1.
So I think that if anything it might just be a matter of a little timing, I think, but I feel quite confident that we'll be in that range -- we'll hit that, probably exceeded it by Q1. Some of the old gathering revenues that we're counting on toward the end of the year didn't come on quite as quickly as we had anticipated, and that probably will end up being the biggest reason if we don't get to $25 million in the fourth quarter. But we're still going to get (inaudible) close to it, Tim. And I would say for the year as a whole, we'll probably come out somewhere probably in the middle of the $65 million to $75 million that we had anticipated for the year.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
The other thing that I'd say Tim is, when you look long-term out into 2019 and beyond, the Group has gotten the capacity, it's 80% of capacity out there on their gas processing. The same thing, they have secured some long-term third-party contracts that bode well and give stability to the cash flow. And so everything has gone -- everything is working, and everything has gone pretty much as planned and the delays were not by us so much as some of the water way issues that were belonging to -- provided that other people was in their area and really beyond their control. But they've worked hard to get them done. So you're days behind, but you're not months behind.
Matt Hairford -- President
(multiple speakers) I'll just underscore what David and Joe said. In regards to the -- how we're handling the assets, we have the infrastructure in place for the oil gathering when we finally get to crude line up to, so we're ready to go there. In regards to the plant, we've got an electrical substation that was done on time, on budget, that gives us better quality, more reliable power for us to run the substation and also some more saltwater disposal facilities. The amine treater that we've been talking about is on time too, and what that's going to allow us to do at San Mateo is to process some small amounts of CO2 and H2S out of the gas and also run that plant on full ethane recovery.
So San Mateo, that's a great thing, as Matador that's even a better thing that we can recover as much of the ethane as possible. So that will be done for the entire volumes for the plant when we have the NGL contract to back that up. So all those NGLs that are produced are guaranteed to be fractionated and transported. So feel really good about where that asset is right now.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
And one other thing, Tim, is I like to put things in proportion, and the first plant that we built down there in Wolf that we sold to EnLink its capacity was about 30 million. Now we're up to 200 million up at Rustler Breaks. So that's six times to seven times the capacity we had down there at Wolf. And things are looking promising and we're considering a lot of options including ultimately building our third train up at Rustler Breaks that would double the capacity from 200 million to perhaps something approaching 400 million. That's not guaranteed, but that's -- but it's nice to be able to consider that that is something that is possible. And that's -- those are nice projects to consider is what I'm saying, and we got some good choices and some good optionality.
Timothy Rezvan -- Oppenheimer -- Analyst
Okay. I appreciate all the color. Just given everything happening at Antelope Ridge, it seems like there's a lot of options on the midstream. So I'll leave it there. Thanks for your time.
Operator
Thank you. And our next question comes from Gordon Douthat with Wells Fargo. Your line is now open.
Gordon Douthat -- Wells Fargo Securities, LLC -- Analyst
Hey, good morning everybody.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Hey Gordon.
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Gordon.
Gordon Douthat -- Wells Fargo Securities, LLC -- Analyst
Hey. Just wanted to ask about Antelope Ridge actually, with the well results they had, they look pretty strong, obviously a good area. That was -- just wanted to inquire about your completion designs there, and see if you're doing anything different on that front relative to the other parts of the basin?
Matt Hairford -- President
Yes, Gordon, this is Matt. And we are continuing to tweak our completion design, we've kind of settled in on profit volumes and fluid volumes. We have been tinkering a bit with more slick water designs. We've also been looking and pumping more and more regional sand, as we've talked about before, we took a pretty methodical approach to getting into that part of the business, but we're getting more and more comfortable with it. We are continuing to test different cluster spacing and just overall just optimizing the completion design.
The other thing that we've been doing and it's not related to completion is targeting. We've got seismic in the area, so we're able to utilize our MAXCOM operations to steer the wells better and find better zones to drill them in. And plus it's just a good area with some great rock.
Gordon Douthat -- Wells Fargo Securities, LLC -- Analyst
Okay. And then specific to that, your comment Matt, on the seismic. Do you have that across your various areas, or is that something that could apply to other areas should you get that?
Edmund Frost -- Vice President of Geoscience
Yes, hi, Gordon, this is Ned Frost. We do have the seismic over Rustler Breaks and Antelope Ridge. We have some data in-house right now, up in the Ranger area and we are participating in a group suite with Fairfield across pretty much of all northern half of the Delaware Basin. So moving forward, kind of into '19, we will have the bulk of our acreage under 3D in the Delaware Basin, and really we've seen a lot of value out of that data, so far, and I want to reiterate what Matt said, is that we are seeing the targeting with seismic and the identification of targets is really helping well results. I might also left out that we do have coverage over our Jackson Trust asset and our Wolf asset too. So increasingly we're going to be folding that into our workflow.
Gordon Douthat -- Wells Fargo Securities, LLC -- Analyst
Thank you, guys.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Thanks, Gordon.
Operator
Thank you. And our next question comes from Neal Dingmann with SunTrust. Your line is now open.
Neal Dingmann -- SunTrust Robinson Humphrey, Inc. -- Analyst
Do you hear me guys?
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Yes.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Yes, Neil.
Neal Dingmann -- SunTrust Robinson Humphrey, Inc. -- Analyst
Hey Joe, a question on just for you and all the guys, you had such an obviously tremendous well there -- that setting a new record on that strong 14-24S. My question is, is that just continued improvement with your D&C or was there anything sort of special to note on that one from a D&C side or that caused that one to be so exceptionally good.
David Lancaster -- Executive Vice President Chief Financial Officer and Assistant Secretary
Hi Neal, it's David. I think as Matt mentioned there, it's clearly a good area, there is -- it's good rock. But, I'd also like to compliment our Geoscience team, I think that again to sort of what Matt said about the importance of targeting and kind of the follow-up on what Ned said about the use of the 3D, we thought we had chosen a good target in the Thorsness well, and clearly we have because it was about a 3,000 BOE a day well, and we were kind of -- as Joe like to say, turning double back flips on that.
But the Geoscience team, I think really sort of adjusted the target just even a little bit on this well, and I think the other nice thing was, we were able to really do a great job of staying precisely in that target for the entire length with the lateral. We did a good job in the Thorsness, but this particular well was -- was exceptionally good I think. And I think that's attributable a lot to the MAXCOM team and the fact that we have that Group downstairs working 24/7 to be sure that these wells are steered right where they need to be. And I can't help but think that that also made an impact on the quality of this well.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Yes. I'd like to give a shout out to our MAXCOM, they go 24/7, seven days on, seven days off, and they are staying in zone better. So if you stay in zone an extra 100 feet or 10% that adds to your reserves. And there, it's a mix of geologists and engineers and they work together interdisciplinary. And there are the televisions (ph) that go out in real-time to the well with the directional drilling. And this was Billy Goodwin's idea, our Head of Operations that we think he's really making a lot of contributions there. And I have to admit I was -- had reservations at first because they wanted to use the room, I was going to have as a boardroom, and so we didn't get the boardroom, we got to MAXCOM room. But they're saving money on every single well. And they're adding net fee to pay because they're staying in zone, and so it's --
Billy Goodwin -- Executive Vice President and Head of Operations
I think it's a perfect example of working together. We've got engineers sitting next to geologists shoulder-to-shoulder down there, and they are not only working on the geosteering but they're working on drilling performance. So you've got the advantage of having geologists sitting next to drilling engineer when they start talking about why it's drilling faster, why it's drilling slow, there may be a very good geological reason why things are happening. So they're saving money and drilling better wells, so that's about us.
Matt Hairford -- President
Yes, Neal, I'll just quickly say also that, no matter where you put these wells, they still all got to get fracked and I think that the completions guys also just do a terrific job of getting all these stages pumped away successfully, and it makes a big -- big difference there constantly trying to innovate and improve on what we're doing out there. And I think this was just a case where all comes together and one thing I've always known is that fracking makes -- fracking sometimes make bad wells good, but it always makes good wells great. And so this is one of those cases where I think it took a good well and made it great.
Neal Dingmann -- SunTrust Robinson Humphrey, Inc. -- Analyst
Greater color, guys. And then just one follow-up. I think, Matt, some of you guys were hitting on this earlier. Can you just talk about over in the -- over in Antelope and then Stateline, just maybe in broad terms, how you see the infrastructure build out, sort of progressing, not necessarily just remainder of this year but more for '19, if you could?
Matt Hairford -- President
Yes, Neal, I think the advantage we have there is obviously the blockiness of it, that acreage and the number of wells we're going to be able to drill from a minimal number of surface location. So the team is -- as we speak, they are actively putting all that together, finding out where they're going to put drilling pads, where they're going to have production pads and how the infrastructure -- the internal infrastructure is going to look. And at that point we can decide what we want to do with those volumes whether we want to tie into somebody locally or whether we want to do it with one of a midstream -- another midstream company or whether we want to do it ourselves. So it's a big enough thing that we're working on it right now, and not just at gas, oil and water, but also electricity. I mean we've been talking about the substation and getting electrical on these blocks is going to be important too. So that's ongoing Neal and it'll be a part of our development plan.
Neal Dingmann -- SunTrust Robinson Humphrey, Inc. -- Analyst
Great, thanks so much guys.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Thanks, Neal.
Operator
Thank you. And our next question comes from Noel Parks with Coker & Palmer. Your line is now open.
Noel Parks -- Coker & Palmer Investment Securities, Inc. -- Analyst
Good morning.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Good morning.
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Good morning, Noel.
Noel Parks -- Coker & Palmer Investment Securities, Inc. -- Analyst
Yes, I want to turn to the Eagle Ford and I was interested in hearing as far as making the decision to put a rig back out there, what was it that sort of pulled you over the line in making that decision finally, the LLS premium stand in place, service cost day rates, other peers returns. And I'm also curious what well cost and you were thinking, and then also the working interest we might see from the 10 wells.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Okay. I'll start off and you all pitch in. I'm not sure that we're all of exactly the same mind, but when we weight those various considerations that you've mentioned, some of those guide them different way, but in the end, we were all of the consensus that this was the right thing to do. You have a differential, so you took advantage of the little better oil price that you got. You were also validating -- we didn't have a lot, most of our acreage was HBP already, but with these wells, you'll get, I think approximately 95% and nothing else would have any expiration until 2020. So we thought that was a positive thing and we also thought it was good to look at the economics. And I am pleased to say that the first well out of the box established a new record in time it took to drill. And now I'll turn that over to Matt for further details.
Matt Hairford -- President
Yeah, I think, Noel, it's a great story. When we came back and started drilling last year on that -- on our Eagle Ford acreage, we hit the ground running. We picked up the Patterson rig. The new Patterson rig and brought it down there and started drilling and drilled the fastest well we've ever drilled on Martin Ranch. We picked up this Patterson rig. Again, it's one of their XK (ph) rigs, their high tech rigs that we like and all seven of the rigs we have are these XK rigs. So it's been really nice working with Patterson.
And like Joe said, not only was the first well, the fastest well we had drilled, the second well was just a few hours slower than that. So the two fastest wells we've drilled in Eagle Ford were right out of the box with this new rig. So very happy about all that. The other thing I think we're anxious to do is just to complete these wells. And one of the things that happened last year we drilled these wells, we brought the completion technology that we advanced in the Delaware and put them on these new Eagle Ford wells and it did really, really well with those completions. So we'll be completing the first ones here towards the end of the year and look forward to how those are going to turn out.
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
And Noel this is David. You asked the question about the working interest and actually, I can tell you that most -- all of these wells will be essentially 100% working interest for Matador. Probably on the cost, I imagine we're probably plus or minus of $5 million if we have a one mile well and probably, in the order of maybe seven, eight, if we have a 1.5 mile, 2 mile well. And some of these wells will be longer laterals. So I think about six of the 10, will be longer laterals.
Neal Dingmann -- SunTrust Robinson Humphrey, Inc. -- Analyst
Okay, great. And I also noticed in the press release you mentioned that the wells would primarily be targeting the Eagle Ford. Does that mean you'll be doing other targets as well, Austin Chalk or something else.
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Yes, that is what that means. I think as we noted earlier, when we announced the rig, we'll probably do one or two Austin Chalk tests. We've not actually done any test on the Austin Chalk, on our acreage and so that's, that's something that we do plan to do with the well or two. We think that certain of the areas are perspective for the Chalk and so we're probably going to give that a shot here in this program.
Neal Dingmann -- SunTrust Robinson Humphrey, Inc. -- Analyst
Great. Thanks a lot.
Operator
Thank you. And our next question comes from Irene Haas with Imperial Capital. Your line is now open.
Irene Haas -- Imperial Capital -- Analyst
Yeah. Hey. So my question for you is really getting the oil and gas out of Delaware Basin can be pretty daunting and challenging, understanding that you have a plan at Wolf and Rustler Breaks which is going great. Elsewhere, I'm kind of curious when you try to secure a third-party gas processing, how difficult was it and what did you do precisely to end up with just 1% gas flare considering how tough things has been. And then, the second question is really mid-cush differential, looks like October is worst. Any color.
Matt Hairford -- President
Yeah,Irene, this is Matt. In regards to what we've got there at Rustler Breaks and Wolf you're right. We've got very good coverage on getting spread out, getting gas out, getting the gas process, getting the NGLs out where we're rock solid there and what Gregg Krug and his marketing team have been able to do at Antelope Ridge and Ranger Arrowhead and up in the Twin Lakes, they've been able to go out and secure firm capacity for our products. And the discussion kind of goes, Gregg will call and say, hey, can we get this on firm and they'll say yes, and then it becomes a negotiation about price and term.
So knocking on wood here , Irene, but so far we have not had much of an issue getting that done. So and that's how we're severely limiting the number of Mcf that we're flaring. As Joe said earlier, the stuff at San Mateo, the stuff at Rustler Breaks and Wolf were less than 1% and we are in single-digit percent on the other. And that's just time waiting to get interconnects which is one of the beautiful things about being in the midstream business that the E&P company, walks down the hall and says to the midstream company, we need to get hooked up and they get us hooked up.
Gregg Krug -- Senior Vice President of Marketing and Midstream
Yeah, this is Greg. And yeah, I'd like to add a little bit. Yeah. As far as any production that we've had curtailed. It may have only been just because of timing when it comes to hooking up the well. It had nothing to do with being curtailed on downstream markets. We've never been cut back from our market. So we feel really good about that.
Operator
Thank you. And our next question comes from Richard Tullis with Capital One Securities. Your line is now open.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Hi Richard.
Richard Tullis -- Capital One Securities -- Analyst
Good morning. Joe congrats on a very nice quarter there. Two, I guess, bigger picture questions. We've seen at least three E&P industry transactions already this week and those were all or mostly all stock deals. Joe and the rest of the team, how do you view the larger M&A landscape as we sit now and should we look at it as a tougher environment to potentially monetize the Eagle Ford, the Haynesville, but at the same time, maybe it makes it a little easier for you at Matador if it chooses to do a bigger acquisition. How do you view the landscape right now, Joe?
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Richard that’s a great question and we – it’s another question we talk about almost every day in one way or the other. At – one, the guiding principle for us is that we realize we're a public company with a public trust and we're going to play a straight guide. Matador has shown that it sold itself way back there in 2003, we sold our good part of our position to Chesapeake in the Haynesville in 2008, 2009. We sold our first processing plant to EnLink and we sold part of our Rustler Breaks to Five Point. So you know, when a really serious offer comes in we're going to give it serious consideration. And we've said for some time we are not a company that says, we are a single-basin company and we're going to reduce our sales down whatever basin is most important.
Clearly, most important right now is the Delaware, but as you can see being in several basins is shown to be good strategy and that that diversification leads to more options. There are several companies that are talking about themselves now. there -- the wisdom of being a multi-basin. So I don't -- to me that matters so much, whether you're a single-basin or multi-basin, the point of it is to get into the best rock as you can with the best economics and that's what our primary focus is.
At the same time, as I said, we play a straight game. If a company feels that something that an asset that we have, whether its midstream or oil or gas is more important to them than to us and they want to -- we're always ready to talk or trade, JV or whatever they think makes sense and would make sense to us. Usually the people that come in to try to buy, say you know, we're so sorry you are burdened with Haynesville, we'll buy at PDP or you know here we don't want you to have to go down to South Texas, so we'll buy your Eagle Ford and they're trying to buy it on the cheap, that won't work, particularly with the company that has a strong balance sheet. And that's one of the things that you have, is when you have a stronger balance sheet, you don't have to do things.
We're very open to that, but it's got to be full value or to offer something better in trade. But we're very open to that and want everybody to know that look we play the straight game here and when some make sense, we'll pull the trigger on it. Now, I hope that answered your first part of your question, how do we feel about the M&A transactions. And that the safe thing I would say is, this is a group here that is the golden goose. For 35 years Matador, either in its first iteration or the second one has delivered about a 20% rate of return. These guys know how to work together. They've developed a methodology and as long as they can keep generating that and I see us continuing to move forward. And because it's hard to earn that right of return consistently and don't want to kill the golden goose because I think these guys are getting better and better, and hope that you've continued to see since the day we went public, how the improvement has been. We've gone from 400 barrels a day to over 30,000 barrels a day and the consistency that this group has delivered, I think this is now the 17th straight quarter where we've met or beat industry consensus.
So I think and we've grown primarily organically, almost all organically, virtually all organically. And then when you can do that, you'll should be making a higher rate of return when you grow by acquisition, naturally that's generally a lower rate of return closer to 10%. So I think it's made sense what we've done, I think our guys have been very careful about spending the money.
Matt is kind of a guiding principle, he articulated the guiding principle that we want to grow, we want powerful growth at a measured pace and the outspend -- we've had some outspend, but look at what we spend it for. I thank our shareholders have gotten full value and have greatly benefited from the outspend because, if you borrow it at 5%, or 5.625% and get a 40% or 50% rate of return, I think that's good business. But yet everybody here really looks at the financial discipline. So we don't get over our skis and we don't double our rig count, it goes up one rig when we know we've got it covered with good prospects.
So that's kind of attention we want to grow but we wanted it at that measured pace and we wanted to be profitable. And we want to watch the balance sheet, but there are opportunities that come along, that if you don't take them like bolt-on acreage in your tracks or the increased working interest, if you don't take them then you'll never have another chance to do it. And the same thing our midstream, these midstream opportunities when we first did it, people questioned why are you doing that?
And you can now see the help that it's been operationally, financially, creating the presence and it's worked out every bid is that's (inaudible) improved takeaways, improved our hedging and so I think your point is very, very well taken and that when we view it all in concept, I think the guys here have done a good job in growing Matador from the size when we went public and you remember how humble our beginnings were. And today we're still got a lot of room for improvement, but we're steadily making progress on that consistency in delivering now over four years of consistent returns that are -- and I'm touching wood, don't know how long it will last, but it looks like it's very encouraging with these better than expected results. Our guys are just finding better ways to target, better ways to complete and reducing the cost, as Matt explained, like with his MAXCOM program. It's -- I don't know where the end of that is, but each of the groups keep finding ways to improve.
So I’ll base – my case on that and as long as they keep telling me they can make further improvements, we'll – the executive group plans to be supportive of that. David?
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Yes, I think you summarized it well. Joe, I don't know that I would have anything to add to that. I think as far as the M&A landscape goes and all, Richard I think Joe is just right. We know we’re officers in public company and if we should get an offer we'll consider it. And we look for opportunities to improve our company all the time. So -- but I think those transactions are difficult to do. But obviously, as you said, we've seen several of them get done this week.
Richard Tullis -- Capital One Securities -- Analyst
Thank you for that David and Joe. Appreciate your response and that's all from me. I'll leave it there. Thank you.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Well, thank you and thanks for giving me the time to say all that.
Operator
Thank you. (Operator Instructions) Our next question comes from Dan McSpirit with BMO Capital Markets. Your line is now open.
Daniel McSpirit -- BMO Capital Markets -- Analyst
Thank you folks. Good morning and thanks for fitting me in.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Hi, Dan.
Daniel McSpirit -- BMO Capital Markets -- Analyst
I was hoping we could just hit on the company's reinvestment rate, just a little more directly little harder here if we could. There is an expectation on free cash flow generation that's growing in the capital markets today. Are those producers that can achieve this state may be able to separate themselves and what remains as you know is still a very crowded field of independents. Will the company be more explicit with respect to achieving a free cash flow neutral state when laying out its 2019 guide or should an outspend still be expected, given where the company sits in its life cycle?
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Dan, I’m going to say some real short and then I'm going to turn it over to David for further detail. But I'd tell you this is that whenever outspend is discussed, I think it's vitally important to understand it isn’t the outspend, just the outspend. There's two variables involved. What you -- how much you outspend in relation to your balance sheet and second is what are you getting for it? And if we weren't getting some really good results, we wouldn't be outspending or didn't have exceptional opportunities.
So whatever we outspend is on a very select basis and really have to really fit in. That's the first thing. And second, is I am very pleased we've got the kind of opportunities that you would want to do so. And clearly, you've seen how we've grown in value and I think we've made the right decision to go ahead. Having said that, this is a question we talk about, our board talks about and we think we're doing the right thing, At some point our opportunities won’t be as robust as they are now, perhaps and then you'd see that slowdown. And we are closing it in, it's narrowing on that -- on the free cash flow, we're aiming for that to get things in better balance. But, I started with $270,000, so I've had the outspend to grow to get to this point -- and -- to growth to this point. So it's something that we practiced for a long time on a very select basis. But if you just spend the same money that would be lack a football, the two football teams who got to come in and they've all got to -- you can't run around and everybody has to go up the middle and you can't have anybody fast on your team, and you can't throw the ball, but watch.
No, you know that's what this capital market is with different people with different styles, but you still got to be conservative and we practice financial discipline. We've never had a lay off in the 35 years. And I think we do this. So it's a very select basis and it's two variables. So with that let me turn it over to David and let him say what he thinks.
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Sure. Yeah, hi Dan it's David. I -- again I think Joe did a nice job of summarizing it. I might just add with regard to your question about 2019. Certainly, when we put out our guidance for 2019, which I expect would be likely after the first of the year, we will discuss our plans and what we may have in the way of outspend. I think we would expect that there will be an outspend in 2019 with your, regarding your comments about lifecycle. I think of the company or where we are in our lifecycle. So I think we feel like we're still at a scale that doesn't quite lend itself yet through the best of the free cash flow model, but the fact that there is, we could do it next year.
It's, I think it'll be more a matter of choice because of some of the things that we've done recently, particularly in terms of adding the new acreage from the BLM acquisition into the portfolio, that's something we're going to want to get going on. And we're optimistic we'll be able to get going on that, certainly by the fourth quarter of next year, maybe even a little earlier and if we can, we're going to get after that and I think that that will also make a big difference in what we're able to do in the out years. But I certainly would imagine that we'll see an outspend again next year and there will still be I think a couple of years before we'd be able to achieve that.
I might point out that the -- as Joe said, I do think we've continued to narrow in on it every year on the E&P side, on the midstream side, depending on what we decided to do next year. Again, we could also be spending within cash flow on the midstream side. We may decide to outspend that a little bit as well in order to expand our operations from the footprint that we currently have. But again, I think that we've demonstrated that those have been good investments and good uses of money that have created additional value for our shareholders. So I hope that helps.
Daniel McSpirit -- BMO Capital Markets -- Analyst
It does, I appreciate the well-rounded answers. I do, it helps in framing 2019 and periods beyond. And then just as a follow-up just on 2019, David, what are the big challenges to putting up a more capital-efficient year whether it's cost inflation or plateauing of productivity gains or other such variables.
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Ask it again Dan, I didn't quite get what you were asking me there?
Daniel McSpirit -- BMO Capital Markets -- Analyst
Yeah, just what are the challenges that you see (inaudible) putting up a more capital-efficient year whether it's cost inflation or on the production side, just plateauing your productivity gains in the field?
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Well, you know, I think you probably hit on a couple of them. Certainly, although, I'm pretty optimistic that we can continue to improve upon the profitability mix or the productivity mix in some ways just perhaps by the mix of wells that we drill. And I certainly think as we go into the latter part of next year and into 2020 as we begin to fold some of this BLM acreage into the mix and work with some longer laterals, not only in our existing footprint, but, in that acreage that actually our capital efficiency can improve.
So, you certainly have -- you always fatten the declines and that's just a part of this business. But as I look into next year and 2020, I really feel like -- we set up a fair amount of time Dan, in the last couple of years, getting our footprint held by production. And the best way to do that in a lot of these areas was to focus on one-mile laterals, because it allowed us to capture more of the acreage and get it held in a more efficient manner. Even doing that I still think we've done pretty well with our well results and our productivity per lateral foot.
But now that we have a lot of that behind us, I think we have now the luxury of being able to go back and kind of drill the next round of wells on those properties at a little bit longer laterals than we have whenwe started doing that at Rustler Breaks. We're doing it at Wolf and we put the rig up in Stebbins. We already are making plans to have longer laterals up in Stebbins. When we get to the BLM acreage a year from now, we will be consistently drilling, 2 mile and 2.5-mile laterals on that acreage. And so I think that's -- that we actually have some pretty positive things to look forward to in terms of improving our capital efficiency over the next several years.
Daniel McSpirit -- BMO Capital Markets -- Analyst
Superb. Appreciate it. Thank you gentlemen. Have a great day.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Yeah. Dan, before you sign off. I'd just like to add a little bit to what David was saying, is one of these capital efficiencies, I don't think is always recognized or appreciated is this brick-by-brick strategy that we have for adding acreage, as well as the brick-by-brick strategy that I've mentioned on realizing more cash from our asset base is that, we bought last year 25,000 -- we acquired 25,000 acres, a little more than that, and our whole weighted average base of our 130,000 acres is $11,000.
So yes, we bid strongly for the BLM because we consider that the best rock in the country. But the brick-by-brick strategy gave that weighted average where we're well below the weighted average cost that other producers have out there. The same thing this little brick-by-brick, it will make a deal little or small acreage trade also favors. Those are highly efficient capital transactions. While not big in any one instance they add up. If you acquire 1,500 acres a month, end of the year you acquired 15,000 to 20,000 acres that other -- that can be quite expensive, but our guys have done that on that brick-by-brick approach. So -- and the $11,000 an acre, includes our mineral position.
So I think it's -- that's kind of a highly efficient, but not necessarily fully appreciated effort. And then the same thing on our Midstream, that's kind of been working with that has gotten us either cash or carries or -- and further efficiencies, operating efficiencies by having that. So that's an indirect efficiency but it adds up to the bottom line of improving your overall. So we kind of call that our guerrilla campaign, so to speak of getting out there and getting it one way or another. And so when you start with $270,000 which in perspective is one frac stage, you learned all these ways to try and create additional capital but you just don't have very much of it and that culture, I think remains in Matador today.
Billy and the drilling guys look for ways to work with the vendors to challenge them. We don't want to cut prices on you guys. We want you to show us how we can do things more efficiently, and our vendors have really stepped up and whether it's Halliburton or Schlumberger or Patterson or Forrester, they've helped us. And I want to express my appreciation, the Champion’s pipe as well that they -- instead of coming and saying you got to lower your prices, they have helped us, show us ways to use their services in a more capital-efficient way. And I just had to say that I couldn't restrain myself.
Daniel McSpirit -- BMO Capital Markets -- Analyst
I appreciate the additional thoughts Joe. Thanks again and have a great day, gentlemen.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
All right. Thanks, Dan.
Operator
Thank you. And our next question comes from Mike Scialla with Stifel. Your line is now open.
Michael Scialla -- Stifel -- Analyst
Hi, good morning everybody. Just wanted to ask few questions on the Eagle Ford. Can you say where production is now and if you do all of the 10 wells there where you might expect that to go in the first half of '19 and what the drilling inventory looks like there?
Billy Goodwin -- Executive Vice President and Head of Operations
Well, as far as the latter part goes, we still I think have on our acreage position, couple of hundred locations in the lower Eagle Ford that various parts of the acreage that we think can still be drilled. And then of course, as we've mentioned, we've always said in the past we've only tested and only drilled into the lower part of the Eagle Ford. And so we haven’t tested the upper Eagle Ford or the Austin Chalk. Some of the other areas down in South Texas that the other operators have worked with and which we think are also perspective on our acreage. So that inventory could be higher.
As far as the production goes, I think that we were -- I think it was about 8% of our production this past quarter. So I think it was pretty close to 4,000 BOE a day and it's about 2,400 I think barrels of oil a day. So I would expect that I don't think we quite doubled from that, certainly not on the average we would probably get our rates up. With this 10 well program we'll probably early on get up in the 6,000 to 8,000 BOE a day, I would imagine from this program, maybe even a little better. But on average I would expect it for 2019 our production might be 50% better out of the Eagle Ford as a result of this project.
Michael Scialla -- Stifel -- Analyst
That's helpful. Thanks, David. And Joe I want to ask on -- you mentioned, $11,000 per acre average to date in the Delaware for acreage acquisitions. Do you have a number for -- I know you got the BLM number out there, which is a big part of this year's, but just wondering if you had a number handy for the, I believe it's 27,000 net acres you've added this year in the Delaware.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
No, I don't Mike, you just have to factor that into that overall number. But most of that other acreage from the BLM was done at lower levels, including some mineral -- fair amount of mineral acreage that we acquired. So I think our guys have done a real good job, and that is a real -- been a real capital efficient way for us to grow.
Michael Scialla -- Stifel -- Analyst
Agreed. Thank you.
Operator
Thank you. And our next question comes from Sameer Panjwani with Tudor, Pickering, Holt. Your line is now open.
Sameer Panjwani -- Tudor, Pickering, Holt & Co. Securities, Inc. -- Analyst
Hey guys, good morning.
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Hi Sameer.
Sameer Panjwani -- Tudor, Pickering, Holt & Co. Securities, Inc. -- Analyst
So, one of the wells that we've been watching for is the Wolfcamp XY test at Arrowhead. Looks like it was completed this quarter but not much detail in the press release. So is there any color you can provide on how things are looking there so far?
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Yes, hi, Sameer, its David. I would say that we would prefer not to provide any additional information on that well at this time. We have drilled and completed the well and we have some land work that we're doing up in that area right now, and I think until that's done, we'd prefer just to kind of remain silent on the results from that well. So I think we're satisfied with how it's gone, but just because of, we've got a couple of deals we're finishing the work on, and probably be better that we just get that done before we report on the results.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
And we’d also like a little more data history --
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
That's right.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Before we come out. One thing you probably noticed that we've moved to doing 90-day IPs to try to give you all, people didn't seem to like our instant IP, so we've tried to make it a practice of giving a little more data history before saying something. And there can be great change in these wells as you know. So we're encouraged, I will say that, the results are at today have been positive, but we just want to be more confirming before we make an announcement and before we commit more capital to that area.
Sameer Panjwani -- Tudor, Pickering, Holt & Co. Securities, Inc. -- Analyst
Okay, that's fair enough. Maybe on the Twin Lakes well then, did you guys do anything different here versus the initial wells that you've operated or in which you've had a non-op interest. And then are there any intervals being tested by operators in the region outside of the Wolfcamp D and/or the B?
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Yes, this is David again Sameer. With regard to the last question, I'm not aware that there is anything being tested. I mean, not in the Wolfcamp proper. I mean in that area to the west, you've had people that have worked in the OBO and ASO. And historically, there have been any number of different targets. We even tested Strawn several years ago in the run-up to our first well over by the Culbertson, that was the Olivine well. But I think in the Wolfcamp proper, the answer, to best of our knowledge anyway is that if you have been to D or the B, and I think that Continental is the first one that's tried to be out there.
With regard to -- did we do anything different, I would say that we did target a little bit different interval than we had before. We took a whole core on this well also and we did some additional geomechanical testing and not only for targeting, but also for helping us to select a zone that we thought might frac better than what we've experienced in the previous well. I think that absolutely happens. So the well treated much better, and it's just started flowing back and we just don't have a whole lot of results to talk about on it as yet, but I think we should fairly soon.
Sameer Panjwani -- Tudor, Pickering, Holt & Co. Securities, Inc. -- Analyst
Was there anything different on the completion front on that well?
Matt Hairford -- President
Well, this is Matt, and nothing real significant in terms of outside of what we're doing in other areas. I think one of the most important things that David said was we did find a target, we stayed in that target all along the way. And the completion guys spent a good deal of time, looking at data, looking at the whole core, making sure that we have the right design and it went off pretty well. I think it probably fracked as actually better than the other well we have drilled and better than some of the others drilled in the area. We did actually pump some rigs and coated sand on the tail end. So we haven't -- in the early stages of production here we haven't (inaudible). it’s just still a little early to tell.
Sameer Panjwani -- Tudor, Pickering, Holt & Co. Securities, Inc. -- Analyst
Okay, that's helpful. Thank you.
Operator
Thank you. And our next question comes from Jeff Grampp with Northland Capital Markets. Your line is now open.
Jeffrey Grampp -- Northland Capital Markets -- Analyst
Good morning guys. Thanks for fitting me in here. I'll leave it at one quick one here, hopefully. I'm just curious given the results at Antelope which continue to be really positive, is it fair to think that that's the likely bias for where that Eagle Ford rig goes when it wraps it up over there or are there any midstream facility related to build outs, you guys maybe need to get ahead out before accelerating there. And then I guess just building off that are there any stacked pad type tests or anything that you guys might be planning at Antelope Ridge as well?
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
To that question I'd say yes to all of them, is that the Antelope Ridge is certainly emerging as you get more data in. I mean that's one of the things that has changed is, we are beginning to like having a little more data before we have to make a decision. And some of that's too early, it can get you in trouble, but the way it looks right now as we get more and more data, it looks very encouraging. It's little early to declare victory, but it looks good. And the same point about the saltwater disposal, there is a process in getting permits out there, that's not entirely your control. The state, the regulatory, people have a say and how quickly you can get them.
So, we first have to get them before we can drill them, and so the exact order and that rig may drill some Antelope Ridge, go drill saltwater disposal well or two, then come back to Antelope Ridge or vice versa. So that's all part of the planning process and all things been equal, you drill your oil and gas wells at the first of the year and tend to drill your saltwater disposal at the end of the year because they won't have an effect on production. But that's all up in the air as we talk. So does that answer your question? David has something.
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Yeah, I was just going to say -- the only thing I would add is that while we are vibrant (ph) so 100% we're very excited by the way the Antelope Ridge area is testing out and certainly it will, it's going to compete well for the next rig or rigs before very long, especially with the additional BLM acreage that we acquired. But I do want to also say that we've been pretty happy with the results we are seeing recently up in Arrowhead.
I'll point you back to the recent Stebbins wells in the Second and Third Bone Spring, the SST wells that we reported on last quarter. So I will say that team is making a pretty strong statement for having another rig in that area as well. And given the fact that we have a nice several thousand acre block right up there in that area, it is an area where we can go in and I think do some capital efficient drilling in terms of longer laterals, and just leaving the rig parked right there in the same vicinity for a good period of time. So that is something that we're seriously considering in making the rig allocation decision as well.
Jeffrey Grampp -- Northland Capital Markets -- Analyst
All right. Understood. It's a high class problem, but I'll leave it there. Nice quarter guys.
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Thank you.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Thanks Jeff.
Operator
Thank you. And our next question is from Tim Rezvan with Oppenheimer. Your line is now open.
Timothy Rezvan -- Oppenheimer -- Analyst
I'm sorry guys. As a prefer color on Twin Lakes and you gave some, so I'm all good here. Thanks.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Well, Tim thank you and come by and see us. That’s some we'd like to invite all the listeners to is come by and see us in person. Then I think we always gain from meeting you all-in-person and taking all of your questions, and the same time meeting with us and meeting some of these young staffers that we've been touting those guys who are really helping make a difference and adding value in a lot of different ways. That's an open invitation and we'd really like to have you here and we'll buy you lunch or breakfast or dinner or whatever suits you as a further incentive.
Operator
Thank you. Ladies and gentlemen, this ends the Q&A portion of this morning's conference call. I'd like to turn the call over to management for any closing remarks.
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
As I said, please come see us. We would like to get to know you better too. So with that, I'm off and thank you again for the kind words, many of you had we're continuing, we're just as hard as ever and look forward to reporting to you next quarter.
Operator
Ladies and gentlemen, thank you for your participation today. This concludes the program.
Duration: 72 minutes
Call participants:
Mac Schmitz -- Capital Markets Coordinator
Joseph Wm. Foran -- Founder, Chairman of the Board, Chief Executive Officer and Secretary
Scott Hanold -- RBC Capital Markets -- Analyst
Matt Hairford -- President
David Lancaster -- Executive Vice President, Chief Financial Officer and Assistant Secretary
Timothy Rezvan -- Oppenheimer -- Analyst
Gordon Douthat -- Wells Fargo Securities, LLC -- Analyst
Edmund Frost -- Vice President of Geoscience
Neal Dingmann -- SunTrust Robinson Humphrey, Inc. -- Analyst
Billy Goodwin -- Executive Vice President and Head of Operations
Noel Parks -- Coker & Palmer Investment Securities, Inc. -- Analyst
Irene Haas -- Imperial Capital -- Analyst
Gregg Krug -- Senior Vice President of Marketing and Midstream
Richard Tullis -- Capital One Securities -- Analyst
Daniel McSpirit -- BMO Capital Markets -- Analyst
Michael Scialla -- Stifel -- Analyst
Sameer Panjwani -- Tudor, Pickering, Holt & Co. Securities, Inc. -- Analyst
Jeffrey Grampp -- Northland Capital Markets -- Analyst
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