Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

Wednesday, February 25, 2026 at 11 a.m. ET

CALL PARTICIPANTS

  • Founder, Chairman, and CEO — Joe Foran
  • EVP, Reservoir Engineering — Tom Elsener
  • EVP, Chief Operating Officer — Christopher Calvert
  • Chief Financial Officer — Robert Macalik
  • Co-President — Van Singleton
  • Co-President, Chief Legal Officer, and Head of M&A — Brian Willey
  • EVP, Production — Glenn Stetson
  • EVP, Geoscience — Andrew Parker
  • SVP, Investor Relations — Mac Schmitz

Need a quote from a Motley Fool analyst? Email [email protected]

TAKEAWAYS

  • Proved Reserves -- Increased by 9%, as measured by Netherland, Sewell & Associates.
  • Net Undrilled Lateral Footage -- Grew by 2% in 2025 relative to the prior year.
  • Average Lateral Length -- Rose by 6% from 2024 to 2025; 3.4-mile laterals highlighted, specifically on Meredith acreage.
  • Capital Expenditures (CapEx) -- Decreased by 11% in the quarter compared to the prior period, equating to $130 million in CapEx savings forecasted for 2026.
  • Production Growth -- Increased 1% during the quarter.
  • Dividend -- Raised six times in the past four years, resulting in a current 3% yield.
  • Share Buyback -- Initiated in 2025 and positioned as a discretionary tool; management stated, "As you can see through the management employee share purchases, including the guys in the field, we, as a management team, feel like the stock is undervalued."
  • Debt Reduction -- Paid down by $200 million in the last year, now at a leverage ratio "down there to about 1."
  • San Mateo Midstream Operations -- Management reiterated that flow assurance outside the basin is achieved and cited the Bijou/Brinson project as a "changemaker."
  • Use of Produced Water -- 72% of water for hydraulic fracturing in 2025 was sourced from produced water, reducing both CapEx per foot and lease operating expenses.
  • D&C Cost per Foot -- Guided at a midpoint of $7.95 for 2026, mainly attributed to efficiency improvements, longer lateral lengths, and reduced cycle times.
  • Surfactant Program -- Management reported improved preliminary results from 2025 pilots but stated, "any sort of uplift into our 2026 production guidance plan."
  • Woodford Play -- No inventory currently attributed; first pilot well to be drilled in first half of the year, with results expected later in 2026.
  • M&A Activity -- Added 17,500 net acres through 690 transactions in 2025, without a major transaction; described as maintaining a "brick-by-brick" approach for acquisitions.
  • Well Performance -- Completion efficiency improved by 20% year over year, and wells have shown 10% EUR improvements while reducing investment costs.
  • Hedging -- "We are 50% hedged on oil to protect the balance sheet no matter which direction we ultimately head."
  • Bank Support -- Borrowing base was increased in the most recent redetermination, "and all my team were unanimous in their support."

SUMMARY

Management explicitly prioritized free cash flow optimization over production growth for 2026, targeting 3% oil growth while reducing capital expenditures by 11%. The company introduced aggregate EBITDA guidance combining San Mateo and Matador for 2026, revealing a focus on midstream value enhancement and asset drop-down prospects subject to Five Point's ongoing continuation vehicle process. In 2025, Matador used 72% produced water for hydraulic fracturing, directly supporting reduced operating and capital costs. The Woodford play was identified as an incremental opportunity, with a pilot well to be drilled soon and further disclosure of results expected later in the year. Management outlined a continued "brick-by-brick" M&A philosophy, illustrated by accumulating 17,500 net acres via 690 small transactions without major deals in the current year.

  • Management confirmed no Woodford inventory contribution as of this report, framing any successful results as purely additive when available.
  • Artificial intelligence adoption is proceeding deliberately, with management collaborating with external vendors rather than developing standalone programs.
  • Sustained vendor relationships and collaborative operational planning were credited for recent efficiency and cost improvements.
  • No projected production uplift from the surfactant program is included in 2026 guidance pending further data.

INDUSTRY GLOSSARY

  • EUR: Estimated Ultimate Recovery; a metric indicating the total quantity of oil or gas expected to be produced from a well over its life.
  • D&C: Drilling and Completion; the combined costs related to drilling wells and completing them for production.
  • Flow Assurance: Operational strategies ensuring uninterrupted movement of hydrocarbons from reservoir to sales point, particularly via midstream infrastructure.

Full Conference Call Transcript

Mac Schmitz: Thank you, Marvin, and good morning, everyone. Thank you for joining us for Matador Resources Company's fourth quarter and full year 2025 earnings conference call. Some of the presenters this morning will reference certain non-GAAP financial measures usually regularly used by Matador Resources Company in measuring the company's financial performance. Reconciliations of such non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP are contained at the end of the company's earnings press release. As a reminder, certain statements included in this morning's presentation may be forward-looking, 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-Ks and any subsequent quarterly reports on Form 10-Q. In addition to our earnings press release yesterday, I would like to remind everyone that you can find a slide presentation in connection with our fourth quarter and full year 2025 earnings release under the Investor Relations tab on our corporate website. And with that, I would now like to turn the call over to Mr. Joe Foran, our Founder, Chairman, and CEO. Joe?

Joe Foran: Thank you, Mac. And thanks to everybody who is listening in. Has taken the opportunity to participate in this conference call. The first thing I do, really encourage you to look over the slides, particularly if you do not have time to read the whole press release that we had. There has been a lot of thought put into those slides to try to make important points that I believe are essential to the Matador story.

Second, if you also do not feel you have been given an adequate opportunity to ask questions, we want to invite each of you to come visit us at our offices where we will make sure that you are given all the time that you want to ask your questions and get your answers.

In particular, we would invite, if you do come, we will make sure that you get to have lunch with the executive team or most of the executive team that is in town, or if you would rather, we will arrange for you to meet or have breakfast or lunch with a lot of our young leaders and get to know the people who are coming up and being pillars of support and activity and are just doing a wonderful job, great job, in directing our various activities.

And, of course, they have had some years of experience, but they are the ones who are actually on the job and the first level of supervision and executive action, which you know, none of that seniors will be in there, and give you that opportunity to get some very frank responses. And that invitation goes and just work through Mac to set up such a meeting. Then what I wish to emphasize today in this conversation is the quality inventory that we procured over time, particularly in the Delaware, where I started Matador over 40 years ago—43 to be exact—and that is where we started out in the Delaware.

So we have got, reflect, over 40 years of experience and still think it is the best rock in the country. And we like the position that we built. It is now over 200,000 acres, and if you are going to—my experience having started a company is—when you are in what you feel is the best rock, it is a lot easier to build than trying to get over some of these outline areas. So feel free to ask whatever tough questions you want on the inventory. I think our position stands out against anybody acre for acre. Second is I hope you will note the strong balance sheet that we have and that this past quarter, we increased production.

Most importantly, we increased reserves by 9%, as measured by Netherland, Sewell & Associates. So we increased production and reduced debt, and we had strong cash flow throughout even though prices went up and down throughout the last 90-day period. We believe this inventory, balance sheet, the strong cash flow, all lead to growth optionality. And with San Mateo, we are now at flow assurance outside the basin. Bijou/Brinson has been a changemaker for us, and we are excited to work with Energy Transfer on that opportunity. And with that, we will take the questions. May?

Mac Schmitz: Sounds great. Thanks. Marvin, we are ready for Q&A.

Operator: Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Ladies and gentlemen, due to time constraints, we ask that you please limit yourself to one question. Again, we ask that you please limit yourself to one question until all have had a chance to ask a question, after which we would welcome additional follow-up questions from you. First question comes from the line of Noah Hungness of Bank of America. Your line is now open.

Noah Hungness: Hey. Hi. This is Noah here. I got—so you guys increased your net undrilled lateral footage by 2% this year. I guess, what was this delineation or a result of your brick-by-brick land strategy, and were these location—where were these location adds? And you also had some pretty significant inventory adds in the Avalon, 3rd Bone Spring carbonate, and Wolfcamp D. Are you seeing something that you like from those formations?

Joe Foran: Hey. First, I would just say it was a lot more than one question, was it not? So which one of those do you want Tom to answer?

Noah Hungness: Really, just if you could, on the inventory adds, and if you are seeing anything you like on the Avalon, 3rd Bone Spring, or Wolfcamp D.

Tom Elsener: Sure, Noah. This is Tom Elsener, EVP for Reservoir Engineering. Definitely appreciate your question, and it is something we are very, very proud to answer. I would say the production out of the Avalon, in particular, has been very strong. I think we highlighted a particular well in our Southern Ranger asset area called the Gavilon, a very strong Upper Avalon well that has been a very, very high performer. I think it is getting close to having made over 400,000 BOE, very high oil cuts. It is something that we have a lot of running room in that part of the basin for. It is something that we have expanded our inventory in over the years.

It is something we see as a big part of our campaign out in the Delaware Basin. The other zones, various adds all throughout the position is what I would say. I am proud that you noted the increase in footage. Our teams have been very busy doing trades, extending laterals, and we are very proud to see the 6% increase in our average lateral length in our inventory from 2024 to 2025.

We have noted that we have been drilling some 3.4-mile laterals, particularly on our Meredith acreage, that have helped us to dramatically increase our average lateral length, and I think that is something that I would tip my hat to Christopher Calvert and all the operations teams for pushing our lateral lengths out to these types of distances and doing it very, very well.

I think our teams have been able to improve the quality of our inventory through good geoscience support from Andrew Parker, identifying—you mentioned the Third Bone Spring carbonate was a zone that we had not originally included in our inventory several years ago, and it is one that we have drilled very successfully all throughout our Delaware Basin position. Our teams had started in with that target down in our Wolf area many years ago and then moved it further north into some of our properties over in Ranger and then over across into Rustler Breaks, and it has been one that has been a great add to our position.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Neal Dingmann of William Blair. Your line is now open.

Neal Dingmann: Morning, guys. I will make sure to keep to one question. Joe, my question for you and Brian is really just on the 2026 plan. It seems you continue now to target free cash flow over production growth. You look this year, great plan out there for 3% oil growth with 11% reduced capital spend. This is—I compare this to prior years where maybe you were targeting higher production growth. So my question is, you all now believe—I know you talked about value creation being sort of the key driver out there.

Do you believe that the key to the value creation is just this capital and operational efficiency, or what do you all look at as the key for this value creation?

Joe Foran: Well, it is a good question, and it is a fair question. The way we do things, as you know, we like to collaborate with each other, and several of us kinda lean one way and others lean another way on what is important, and then when we roll that all together, it comes out that I think it depends on the time and what the nation's economy is doing and political situation is, which one you lean perhaps more on, what interest rates are, and so there is a lot of factors that go into it, as you would guess, just like what sector of the economy would you invest in?

It varies from year to year and time to time. But our first—we begin with first saying is look for the good acreage, because if you have the good acreage, banks generally have a good outcome. And it is hard to turn bad acreage into profitable or highly profitable wells. So beginning with, is this a well that is in the right areas and the zone that has been properly tested, or is this exploration in effect? The other thing is I lean more towards the long-term reserve growth because when you prove up the reserves, then it becomes optional when you want to complete wells in those zones and bring them to market.

And you want to do it in a deliberate style because as you drill these wells, the more you drill them, the better your per lateral foot or footage rate is because you just are drilling them faster. You have learned to adapt some ways of increasing your footage and reducing your cost. So last call we had, we were beaten up because we had grown our production, but we had also grown our CapEx, and that CapEx was—you know, we took criticism for that.

This quarter, we showed what we could do, the capital efficiencies, that reduced CapEx spending by 11%, and we were able to recover essentially the same amount of production, but to us, most important because of the fluctuation in prices, we increased our overall reserves by 9%. That is not our numbers, but that is Netherland, Sewell & Associates' numbers. And so we thought that was a good outcome in total for the 90-day period, that we increased production a little bit, 1%, but we reduced CapEx by 11% for roughly the same amount of lateral footage, and our overall reserves went up by 9%.

So we thought that is good, but you all be the judge of it, and the market will be the judge of that. But we are pretty excited if we have those numbers headed in that way. Production is up, costs are down, and we proved up some new zones that we are very excited about. And so with fewer rigs, and I will let Chris take over from here—he feels what his most important accomplishments for the quarter.

Christopher Calvert: Yeah. Hi, Neal. Christopher Calvert, EVP, Chief Operating Officer. Great question. You know, when we look at value creation, long-term value creation, I think the fundamentals of your question really do kind of build the foundation of what we think that value creation is. It is profitability, profitability-focused, not necessarily production-focused when we look at that. Then we try to figure out the ways to optimize the levers that build that strategy. And so on the revenue side, you look at the value of Hu Brinson that comes online towards the back end of this year to help improve gas realizations that we spoke to, the production impacts of last in the first quarter.

You look at the CapEx spend, the 11% reduction, $130 million in CapEx savings forecasted for 2026. I would refer you to slide 6 to look at our year-over-year improvements in well costs. And really, even more specifically, I would focus you to slide 19, which I think tells a better story that shows that we are able to achieve these well cost reductions while delivering stronger well results. And so when we can go out and deliver 10% improvements from an EUR perspective and do it at a lower investment cost, I think being able to optimize those levers just continue to improve the fundamentals of that long-term value creation.

So I think it is a great question, something we are hyper-focused on. The CapEx component of our 2026 plan is something that we are extremely thoughtful to that is going to be underpinned by efficiencies, vendor relationships in these volatile times, and we will look forward to deliver that plan.

Operator: Thank you. One moment for our next question. Next question comes from the line of Timothy Rezvan of KeyBanc Capital Markets. Your line is now open.

Timothy Rezvan: Hey, good morning, folks. Thank you for taking my one question. Joe and Brian, we could not help but notice the second priority for 2026 in your earnings release was midstream value realization. We also saw your report aggregate San Mateo and Matador EBITDA guidance for the year. So as we think about the timeline, knowing this is a high priority, it seems like a drop of Matador assets into San Mateo seems to be a precursor to anything. So is that something you could do now? Do you need to let the dust settle on the Five Point continuation vehicle first? Can you just kind of walk through the theoretical steps we could be looking at this year?

Thank you.

Joe Foran: That is a good one question. Alright. Let me try to answer. I was trying to make notes as you were asking that, but no, the limitation of the one question is we are not limiting our time with you all. After these one question you have gone through, if you still have them, stay on the line. We will stay here as long as you want to ask them, and we invite you to come see us. Now an answer to your question that you are talking about is that we approach this on a very holistic approach, and it is not me sitting in a room and telling everybody else what to do.

We gather in here at this room, same room that we are talking to, and we trash it out. Different people have different views, but when we get through, we all feel like we passed out a good plan, you know? And we try to be nimble enough that as the economic climate changes, we will change with it. And so it has been that kind of 90-day period in the past where you had to move cautiously, or I felt my 40 years' experience out here is be cautious. Because cautiously, you have a president saying he wants $50 oil. That is not going to work long term for the industry. It needs to go higher.

You have got a world situation where you have got the prospect of war in Iran. You have got Europe that we are having difficulties on both sides. They do not like some of the things we are doing. And I do not know who is right or wrong, but I hope they get resolved. Europe has been a good ally for us. And then, you know, in our own country, you have this relations with Mexico, Venezuela, all those different countries. So you have the world view you have got to take into account. And we hedged our bet. We are 50% hedged on oil to protect the balance sheet no matter which direction we ultimately head.

But we have taken those precautions. We have got great vendors. Patterson is always helpful to us—timing of rigs and quality of rigs. So it is a complex, multifaceted—and we get the various department heads in here, we hash it out, making sure we are taking all this into account. Five Point has been very good to work with, and that simply is a situation that they have an exit period in their fund, and they have got a continuation fund working so that they can work out long term, and that is making steady progress. And we expect it to be resolved in the near term.

We do not have control over that, but Five Point has been a good partner, and they have done what they said they would do. And so we are watching that. You have got activities. Oil is important to the state, and it makes—so you are going to deal with government agencies like the Bureau of Land Management and the State Land Office on these matters. And what are their plans? So incorporating that in. And then, you know, we really like our bank group, and they have been very supportive. And we have an RBL that, of course, has increased over time as we have proved up more reserves, which is something we take into account.

And in the most recent redetermination by our bank group, they came back and increased our borrowing base, and all my team were unanimous in their support and even raised the amount that they had been offering on the midstream system. So we thought that was a win the whole way through. Other suppliers, B&L Pipco, has been very supportive through time, and we would like to confirm what direction pipe prices are, because when you are drilling these longer laterals, you want to be sure you have the best quality pipe at the best prices. So give credit to all of them and Halliburton on our frac designs and execution.

So I would say, you are not going to make a decision in an afternoon, but you are going to gather together, get everybody's proposals in there, massage them together, and go from there. And so it is something that these long relationships that we have with these vendors really pays off because you really make that time together in planning this that much more efficient. And we think that planning has played a big role in the reduction in our CapEx, as well as the efficiency gains and the timing that we have in drilling these wells.

We are just drilling them faster than we have in the past because everybody knows what they are supposed to do, and people come up with ways to expedite the operation and the drilling plans. Chris, did I leave something out there?

Christopher Calvert: No. I think Joe hit on a lot, and I think to the question, Tim, the relationships we have on the E&P upstream side that Joe has mentioned have been longstanding—a part of the success story of the operational excellence of Matador. And I think to the story with Five Point and the continuation vehicle, I think we are excited about—as they are structuring a deal that allows them to be part of the future growth of the entity now. As the drop-down conversation moves forward, I think that is something that from the E&P side, we have referenced these 3.4-mile laterals.

We have referenced the productivity of the AmeriDev acreage that is now in our asset base, and so I think that is an exciting story from both the E&P side and the wholly owned Matador midstream side, the gathering side. And so I think the cadence of any sort of drop-down, I think that is something that we will continue to work on. But we are excited about the continuation vehicle simply because it is another sign of support from Five Point, and they have been supportive of everything from plant expansions to interconnects between Marlin and Black River. This is just another sign that they want to be a part of the growth story that is San Mateo.

Joe Foran: Chris, I think that is excellent, but I just want to add on to that. We have gotten a number of questions recently about our artificial intelligence participation, and what we found most effective is to work together with our vendors, and where we can use artificial intelligence between us. Most often, they have the program. They are ahead of us, maybe more often. And—but work together, so it is a win-win situation. And so we are taking maybe baby steps, but we are taking it in the deliberate fashion with our partners, some of whom have more experience in this area, and we feel like it is a win—another win-win where we all are gaining from the collaboration.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Zach Parham of J.P. Your line is now open.

Zach Parham: Hey, thanks for taking my questions. Can you talk about how you are thinking about using the buyback going forward? It was relatively limited over the couple of quarters. I know you did not plan to be formulaic with the buyback, but just any thoughts on how you plan to allocate free cash flow to buybacks in the future?

Robert Macalik: Zach, this is Robert Macalik, CFO. Definitely on the shareholder return, we are proud of the cash we have returned in the form of both the dividend and the share buyback. We have raised the dividend six times in the last four years and are really proud of the 3% yield that we have on that dividend today. We just instituted the share buyback in 2025. We think it is a really nice extra tool that we have at our discretion. As you can see through the management employee share purchases, including the guys in the field, we, as a management team, feel like the stock is undervalued.

And so we have been trying to be prudent with our capital, but we do think that the share buyback is a nice tool that we have that we can continue to use opportunistically and feel like between the dividend and the share buyback are really good shareholder return tools to use. And so I think you will continue to see us use that a very conservative way, but use it when there is a dislocation between our stock price and what the rest of the market is doing.

Operator: Thank you. One moment for our next question. Next question comes from the line of Derrick Whitfield of Texas Capital. Your line is now open.

Derrick Whitfield: Good morning all and thanks for your time. Wanted to focus on surfactants with my question. Could you perhaps elaborate on the enhanced performance you are seeing in your well results, the degree at which you could expand the program in 2026, and how much of this is baked into your guidance?

Christopher Calvert: Great question. This is Chris Calvert again. I will start with the back part. We have not baked any sort of uplift into our 2026 production guidance plan. So I will put that out right now. As far as quantifying the successful results, we are excited about the pilot test we did in 2025. We have long used surfactants throughout completions. This is something that, as the technology advances, as we continue to delineate from a subsurface perspective in the parts of the basin that we feel could be more benefited from advanced surfactants, that was kind of the basis of our pilot test in 2025. So we are excited about the early results.

As we look into 2026, once again, no sort of uplift is baked into the production. However, I think it is a little early to speak to the enhancements or uplift other than the fact that we have noticed that it is formation-specific. Certain formations respond a little better, but I think that could delineate and differentiate as we move into 2026 as we test in different parts of the basin. So stay tuned. We are excited about the 2026 plan. Once again, the capital is projected into the budget, but not production.

Operator: Thank you. One moment for our next question. Our next question comes from the line of John Abbott of Wolfe Research. Your line is now open.

John Abbott: Hey, thanks. My question is really on the Woodford. What is the strategy there? Your position primarily held by production? You are drilling your first well in the first half of this year. You have additional pipeline capacity by the end of this year. Is there further derisking in 2027? How are you thinking about that play?

Christopher Calvert: Yeah. John, this is Chris. I can take it again and probably pass it to Tom. You know, we are excited about the Woodford. Obviously, our geoscience team has long looked at deeper parts of the basin. We are excited about—we have delineated and have producing wells out of 23 discrete horizons in the basin. The Woodford would be additive to that. And so we have a geoscience team who has long looked at parts of the basin.

And I think if you have looked at public data about some of these well results in and around ZIP codes in which are being reported, you will see that there is a nice overlap to what we think is the fairway of this basin that is existing to current Matador acreage on the map. And so we look at this as additive, and I can kick it to Tom.

Tom Elsener: Hey, John. Appreciate your question on the Woodford. This will be our first foray into Woodford, and so I would say our primary objective is to learn as much as we can about the Woodford and all the other zones immediately adjacent to it. We will be drilling a pilot hole and running logs, and I know Andrew Parker can speak more to some of those things. But we do have a nice position over there on the eastern side of the basin where others have had some success further over into Texas in the Woodford. Clearly, we are very excited about it, and so it is something that would be purely incremental to our current inventory.

We have not yet awarded any inventory whatsoever to the Woodford. So it would be a great win from our side, but I will pass it over to Andrew Parker to speak more.

Andrew Parker: Yeah. Thanks, John. You know, just to add on to Chris and Tom here, we have had our eye on this. We are really excited about the results in Texas, and we really like our rock in New Mexico. We think we have a lot of running room here. Again, it is very early, but we are excited to share more about these tests later in the year. But the Woodford—it is an important part of the petroleum system in the Delaware Basin, which just adds to our confidence of being in the best basin here and our confidence in our inventory process basin as well. So we are really excited about it.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Scott Hanold of RBC Capital Markets. Your line is now open.

Scott Hanold: Yeah. Thanks for taking my question. Can you—Matador basically built itself on the brick-by-brick M&A as well as organic growth. With—and moving forward, it looks like, I think, the growth rate is obviously coming down as well as Matador. But what do you see in terms of the ways to add values for Matador going forward? And do you see a lot of M&A opportunities left—continue to consolidate?

Van Singleton: Hey, Scott. This is Van Singleton, Co-President. Thanks for your question. I think you can see from last year that our brick-by-brick approach was effective, as it has been for some time. And 17,500 acres without doing a major transaction, that was 690 or so individual transactions. I think you can count to see us be vigilant to protect the balance sheet, but always look for good opportunities in the future. We try to keep a pipeline of deals coming in, but they need to be the right deals in the right neighborhoods.

So many of these are in units we have or adjacent to units that we have to form these longer laterals, and we are excited to see there are still opportunities out there, and we will continue to make trades that are good for both sides. You know, again, just like doing the deals with EnCap, they have been good partners to work with, and we look forward to other deals like that coming up. And if some bigger deals do come up, we will give them full evaluation and due consideration. But we need to stick to our strategy of protecting the balance sheet and putting ourselves in a position for future growth.

Do you want to add to that?

Brian Willey: Yeah. Hey, Scott. This is Brian Willey, Co-President, Chief Legal Officer, and Head of M&A. Just to pile on to what Van said, I think we have shown that we can grow in different ways. We did the AmeriDev and Advance deals in previous years, and then, as Van said, we did 17,500 net acres and essentially replaced our inventory that we drilled last year through smaller deals. And so I think that is a differentiator for us, that we can grow through the bigger deals, and we do think there will be some out there in the future to look at.

But in the years that those are not there, we can grow through the brick-by-brick approach, and we really do feel like that is a differentiator for Matador.

Joe Foran: Scott, this is Joe. And let us put a little bit of this in perspective. You know, I started, as you know, with $270,000 in 1983, and today, we have got over $10 billion in assets. So throughout that 40-year period, the same question has been asked and asked again: Do you think you can grow anymore? Has there been so much consolidation that there are not opportunities out there? We have always been able to find opportunities, and I do not really see it much different, and we think we aim for being better, not just bigger. And in a lot of these situations, by going after these areas like Woodford, they fit us very well.

I am not sure it fits a major. They need to be down there where they have got hundreds of thousands of acres. And these are smaller, but they still fit us, and we consolidate that way. And Van and others have an active trading circle where we give here in their area, they give back. So those arrangements are working. And as far as the profitability goes, I think we have proven over 40 years that we have managed our money well to reinvest in the right areas, and even at Old Matador, we were investing in the right areas there in developing trade. So we have been active in each of these extensions.

And we have had merger opportunities—many merger opportunities—but so far, we found this works best to be as we are. We are a little unique in a lot of areas, and one thing is the collaboration with each other in the company as well as with our outside relationships. And a good example of this is working with Plains as we have, and we have done some—they made us wear some very good ways—to add to production and make sure we are in the right areas and right equipment, what is on pipe and what is still on trucking.

And another example is that, so rather than fret about who is the next merger or anything, we try to work on the efficiencies, and things have worked out pretty well that in 43 years, we moved from one rig part of the time and having $300,000 in assets—which at the time, I thought was a lot of money, but not so much today when we are drilling 3,000 feet or more and gain efficiencies there. So the business has changed, but the basics about building relationships, being in the absolute best area you can afford, and working trades to consolidate things, and look for the new technology—all that, you know, it is the same thing in sports.

It is not how big your school is, but it is often about how good your people are. I mean, you look at University of Indiana, had not had a winning season or championship since the 1800s, the late 1800s, but then they win the national championship because they got better people. And it is not that we can bribe people into coming, but we do have a dedicated group of professionals who try to get better every day. And you have been to our offices often, and, Scott, would you not agree that it is a very motivated group here that works well together and has kind of a unique culture to it?

But I ask that question of you if you respond.

Operator: Thank you. One moment for our next question. And our next question comes from the line of Paul Diamond of Citi. Your line is now open.

Paul Diamond: Thank you. Good morning, all. Thanks for taking the call. Wanted to touch on D&C in 2026 for a moment. You guys guided towards a midpoint of $7.95. Talked a bit about cycle times, lateral length, batch development. Wondering if you could parse that a little bit on how those improvements are kind of broken out amongst those groups or any other levers.

Christopher Calvert: Yeah. This is Chris Calvert. You kinda tailed off on the back end of the question, but I will repeat it a little bit and then whatever I missed. So you said a little bit more commentary surrounding increased lateral length, reduced cycle times that led to the reduction in our D&C cost per foot to $7.95. And so I think, Paul, the first thing I would point to is when we look at this improvement in D&C cost per foot, it is largely efficiency-driven. As we look to—we have talked a lot about this well batch that sits on our AmeriDev acreage. It is 3.4-mile laterals. We expect to turn in line the first part of this year.

That is contributory to the 10% increase in lateral lengths. And so when we speak to the ability to do more with less—and I think that is a standard story that is somewhat spread across the industry of being able to drill the same lateral footage or accomplish the same with fewer rig counts—stories like increased lateral length help contribute to that. And so when we look at improvements in completion efficiencies, we were one of the first to do SIMO and Trimopress in the Delaware Basin. It has stayed a large part of our completion story.

We have seen completion efficiency improvements of 20% year-over-year as far as completed lateral footage per day, all of which contributes to lowering your D&C cost per foot. And so when we think about cycle time improvements, that really underpins the ability to turn in line the same net lateral footage in 2026 versus 2025, do it with a $130 million D&C capital savings year-over-year, and then also still be able to deliver moderate production growth in the form of 2% to 3% organic oil volumes. And so I think the underpinning story to the July number is largely efficiency-driven, focused on, like I said, longer laterals and reduced cycle times.

Operator: Thank you. One moment for our next question. And our last question comes from the line of Philip Jungworth of BMO. Your line is now open.

Philip Jungworth: Yeah. Thanks. Was hoping you could talk about the better wells for less money slide, and I was really interested in, first, the forecasting of EURs and the bottom-up build here and then, second, the footnote around excluding wells drilled by Merida or Advance and whether this has been a drag on historical EURs and if Matador-designed wells are demonstrating improvement across this acreage.

Tom Elsener: So, Philip, it is Tom Elsener, EVP for Reservoir Engineering. I will take the first part of that one. What we are really proud of is the continued improvement in our well productivity over these years, and really highlighted by our own operations and showing how we have been able to improve our BO per foot of lateral year-over-year. It is something we are really proud of. It is not something that just comes very easily. It comes from a combination of improved targeting, improved spacing, improved completions, many of the different operational improvements that Chris has been lining out, but also from our geoscience teams finding better places to buy acreage, better places to land the wells.

Combined with the approximately 25% improvement in cost per foot over these years, there are some very big improvements to the rates of return and the quality of the inventory, and we are certainly very proud of the AmeriDev acreage and the Advance acreage. And those have been great acquisitions for us. As has been mentioned on the deal front, we have been very successful with big deals and the smaller brick-by-brick transactions. So Matador has improved its portfolio over the years through the wide range of different techniques.

Joe Foran: You know, if I tag on to your note, Philip, it is just that as an example of these efficiencies, it does not just—it makes the well better, but it has generated additional cash flow that we have been able to pay down our debt, and last year, for example, we paid it down by $200 million. So we have gotten our leverage ratio down there to about 1, which gives you more options, having that kind of balance sheet strength. And so we tie those together in our discussions that I mentioned when we collaborate. What does this mean?

Operator: Thank you, ladies and gentlemen. This ends the Q&A portion of this morning's conference call. I would like to turn the call over to management for any closing remarks.

Joe Foran: Well, I would just like to say if anybody else on the call does not feel that they got your questions answered, please give a call in to Mac, and we will arrange a separate conference call. But we want to make ourselves available to you because we think there is a lot of good progress being made, and we are very excited about some of these new areas that we are developing.

It is just hard to always fit it in a 90-day period, but as this year goes along, I think you are going to see why we are as optimistic about the year as we have been, and hope that oil prices will stabilize and that some of the disruptions will be settled over time, and then the economy will remain strong. But give much credit to this team, and continue to grow and work that much better together, and reiterate our invitation to come see and meet the people in person that have a direct effect on the value of the company.

And then meet some of the younger people because I think they have done a very impressive job. With that, I want to be sure and give a shout out to Glenn Stetson. Glenn has not been called on to say much, but he has watched over both the production and the midstream and kept both of them running even in bad weather and other times. And so, Glenn, if you want to say anything, please do so now. And if you want me to ask you a question first to give you a structure to do that—but you watching over those two very important areas that have to work together, the production and the midstream.

Glenn Stetson: Right. Yeah. Thank you, Joe. Yeah. This is Glenn Stetson, EVP of Production. I think Tom and Chris both gave examples of things that we are doing on the efficiency side. I would like to provide an example of where both Matador, San Mateo, and, on the completion side, the production side, and the midstream companies worked together to achieve some of those efficiencies. And one of them is on the produced water side—using produced water for hydraulic fracturing operations. In 2025, 72% of the water that we used was produced water.

That has the benefit of both reducing our CapEx per foot but also reducing our lease operating expenses, and we could not achieve those results without the help of San Mateo and Matador's midstream—wholly owned midstream—properties or assets. So I just wanted—that is just another area where we are working together to help on all fronts.

Joe Foran: And try to help put the flow assurance, the importance of flow assurance into perspective is if you are going to—as I have often heard, some of you have heard me say it—if you are going to be a cotton farmer in Dawson County, Texas, you better also try to own part of the cotton gin because you have got to gin your cotton before it gets to market. And it is the same thing. After we produce the gas, it has got to be collected by a midstream entity and then taken to market.

So we started in on that view when we went public, when first Matador went public back in 2012, that it was important over the long run to have an interest in the midstream to be sure you had flow assurance, and that has delivered a lot of benefit to us through time. Now we are not cotton farmers, but I believe it is an apt analogy.

Mac Schmitz: Marvin, with that, that concludes our closing remarks. Thank you.

Operator: Ladies and gentlemen, thank you for participating today. This concludes today's program.