Matador Resources Company announced initial production results from its 21 Margarita wells that were acquired in connection with the purchase of Advance Energy Partners Holdings, LLC (“Advance”) in April 2023. In addition, Matador is pleased to announce that the lenders under San Mateo Midstream, LLC’s (“San Mateo”) revolving credit facility have increased their commitments by $50 million from $485 million to $535 million.
Initial Well Results – 21 Advance Wells
Matador’s record production of over 135,000 barrels of oil equivalent (“BOE”) per day during the third quarter of 2023 was driven in part by the 21 Margarita wells that were acquired in connection with the purchase of Advance in April 2023. These wells are located in our Ranger asset area in Lea County, New Mexico, and each has a lateral length of 2.25-miles, resulting in approximately 240,000 completed lateral feet, which is the largest single batch development project in Matador’s history.
These 21 wells were completed and turned to sales beginning in mid-August 2023. Matador is pleased to report that the 24-hour initial production (“IP”) test results from the 21 wells averaged approximately 1,600 BOE per day with high oil cuts averaging approximately 84%. These 21 wells were drilled in five different intervals in the Delaware Basin—the Second Bone Spring Carbonate, Second Bone Spring Sand, Third Bone Spring Carbonate, Third Bone Spring Sand and Wolfcamp A.
Billy E. Goodwin, Matador’s President – Operations, commented, “The Advance transaction was transformational for Matador and for its positive trajectory. In this transaction, we added approximately 18,500 net acres in some of the best areas of the Delaware Basin. We are encouraged by the initial results from the first set of 21 Margarita wells, which were as good or better than our expectations. We are particularly pleased with the results from the wells that were drilled in the Third Bone Spring Carbonate interval. For example, the Margarita 13 Fed Com #16H well had a 24-hour IP test result of 2,593 BOE/d (86% oil), which places it among the best Third Bone Spring Carbonate wells in the area surrounding the Advance acreage in Lea County, New Mexico. All 21 wells are currently producing at restricted flow rates through Matador’s newly constructed consolidated production facilities designed to reduce emissions and improve lease operating expenses. The Margarita facilities were designed to be sufficient to produce the wells without spending the amount of capital that would have been necessary to build facilities large enough to produce all 21 wells at their maximum initial rates at the same time. Due to the initial restriction on production from these wells, we expect they will have a slower decline rate than similar wells produced in smaller batches. The initial production from the Margarita wells contributed to our estimated fourth quarter 2023 average production of 145,000 BOE per day that we announced late last month. We are excited to continue drilling and completing wells on the Advance properties going forward including another batch of 21 wells expected to be turned to sales during the first half of 2024.”
Lender Commitments Increased Under San Mateo’s Revolving Credit Facility
Matador is pleased to announce that the lender commitments under San Mateo’s revolving credit facility have been increased by $50 million from $485 million to $535 million. San Mateo, which is the Company’s midstream joint venture owned 51% by Matador and 49% by Five Point Energy LLC, provides essential flow assurance for Matador and other producers in the Delaware Basin through oil gathering and transportation, natural gas gathering and processing and water gathering and disposal services in Eddy County, New Mexico and Loving County, Texas.
Brian J. Willey, Matador’s Executive Vice President and Chief Financial Officer, commented, “The $50 million increase in lender commitments under San Mateo’s revolving credit facility provides San Mateo with greater operational and financial flexibility. In connection with this increase, we welcome JPMorgan Chase Bank, N.A. as the newest member of San Mateo’s nine-member bank group. We greatly value the strong relationships we enjoy with our lenders, which have been pivotal to the growth and success of San Mateo since its formation in 2017. We wish to express our sincere appreciation to each of our banks for their confidence and support, and we look forward to continuing to work together to grow San Mateo’s operations.”