MTDR - NYSE

Good morning, ladies and gentlemen. Welcome to the Third Quarter 2025 Matador Resources Company Earnings Conference Call. My name is Jonathan, and I will be serving as the operator for today. At this time, all participants are in a listen-only mode. We will facilitate a question and answer session at the end of the company's remarks. As a reminder, this conference is being recorded for replay purposes. And the replay will be available on the company's website for one year as in the company's earnings press release issued yesterday. I will now turn the call over to Mr. Mac Schmitz, Senior Vice President, Investor Relations for Matador. Mister Schmitz, you may proceed.

Good morning, everyone, and thank you for joining us for Matador's third quarter 2025 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 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 and reflect the company's current expectations or forecast of future events based on the information that is now available. Actual results 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 the third quarter 2025 earnings release under the Investor Relations tab on our website. And with that, I would now like to turn the call over to Mr. Joe Foran, our Founder, Chairman and CEO.

Thank you, Mac. It's good to talk to everybody again. We think we've had a heck of a quarter. And really pleased with our process. In all of our different areas. And the progress and gonna try to go around the table so you can hear directly from a lot of the people doing the actual work. And but I think they've just done an outstanding job today. We're particularly excited on this quarter because anytime you get to raise the dividend, you generally get a lot of edibles from some from your shareholders, particularly the rank and file shareholders. But also pleased that recognized by the Dallas Moore News as one of the larger companies and in the Dallas Fort Worth area. But the NICE is part of the bill is that when you do the calculations, we're although 36 in size, we're number one in profit per employee. So give a lot of credit to the staff and their contributions. And look forward to this report. And, I know, everybody is interested in knowing about capital spending and and the thought processes behind that. But would tell you if I were faced with the same situation, we would still spend this money just as we did this year. I think the teams really work together on that. And the executive committee of the board and the executive committee of the company all went through this and and and said not only about this quarter, but setting up next year is gonna be one of the most fruitful years we have as we have lots of inventory, lots of cash flow, and good liquidity. And and room on our RBL. So, ask away. I might turn it over to Chris, our chief operating officer, just to describe some of the thought and process that we went through before deciding on this capital structure.

Yeah. Thank you, Joe. This is Chris Calvert, executive vice president Chief Operating Officer. Thank you guys for taking the time to be on the call. And really, I'd like to take a few minutes here to highlight the positives of what was written in the release last night surrounding the capital program and really focus on three things that I feel were probably maybe overlooked. First, I'd like to talk about the underlying economics related to the projects that came into this capital plan. Specifically, we mentioned 12 additional wells that were going to be brought into the 2025 program. To highlight these wells specifically, you know, these wells are in excess of 50% rate of return, million BOE wells, half of which of these fourth quarter TILs we're going to be talking about are in Antelope Ridge. Which is what we've talked about of the highest EURs, not only in our company profile, but also in the basement. So really strong projects associated with this capital plan. Secondly, you know, I think it was somewhat overlooked or taken for granted the advantages and the efficiencies that have been made at the well cost level. We initially came out in 2025 and guided to a midpoint of $880 per completed lateral foot. 've since revised that number down to $8.35 to $8.55 with a midpoint of $8.44. And as we turn on, we expect to turn on roughly 1,200,000 net lateral feet this year that $30 to $45 savings equates to about 50,000,000 to $60,000,000 in capital savings. So not only are we turning on extremely economic projects, we're doing it at a lower well cost level. So our initial investments are actually reduced, which in turn help the economics of the wells. Thirdly, talking about the accelerated operations, I'd already spoken to the 12 wells that we accelerate into 2025. Will also have a positive springboard looking into 2026 with 13.6 net wells that will be turned on at the January. And so as we look to that, can provide extreme good excuse me, positive momentum going into 2026 to achieve 2% to 5% organic growth rate of what we feel is somewhat of an inorganic growth rate in 2025 And so I think when you consider those three things, you know, the economic underlying economic returns of the project, the reduced cost at the well level, and then the positive momentum leading into 2026. I think it leads to a very strong report and a positive outlook for 2026.

Yeah. And this is Rob, CFO. So I just wanted to pile on a little bit to what Chris is talking about. So even though I'm CFO today, I've been chief accounting officer for the past ten years and I've been sitting here at this table with this management team And we're really proud of what we've accomplished and created in a consistent manner over those past ten years. And so one, just to bring in an accounting metric know, we've gone from accumulated deficit as early as just three and a half years ago to, for the first time this quarter, over 3,000,000,000 in retained earnings. So that strong balance sheet, and I'll refer you We have the slide deck out there. I'll refer you to slide 11 You know, I think it highlights the strength of our balance sheet with a point four leverage ratio, Over the past year, we paid 670,000,000 of our revolving debt and have about 2,000,000,000 in liquidity. So that allows us the flexibility to take advantage of like what Chris is just talking about. And so really excited about the well returns and the results that we've had so far this year. And, like Chris said, feel like that sets us up really nicely for 2026. So and at the same time, we're able to, at accomplish the other priorities that we have for free cash flow. We've as Joe mentioned, raised our dividend by 20% this quarter. Land spend, we continue to add on to our land position when we can find the accretive deals that we think make sense for us. And, we don't need to do anything, but we have a really good strong inventory of of greater than 50% returns even at $50 as we mentioned in the release. And then the last kind of piece of that is the opportunistic, share buyback. You know, the management team are buyers, and so, the company is as well. But overall, I think we were able to hit all those priorities this quarter. Like Joe said, had an excellent quarter. And really excited about how this sets us up for 2026. Jonathan, with that, we'll turn it over.

To q and a. All right. Thank you. If your question has been answered and you'd like to remove yourself from the queue, simply press we would ask that you please limit yourself to one question until all have had a chance to ask a question after which we would welcome any additional follow-up questions. And one moment for our first question. Our first question comes from the line of Neal Dingmann from William Blair. Your question please.

Good morning, guys. Nice to see another nice quarter and solid outlook. Joe, my question is really for you or Chris and the team. Just on the op efficiency, something you were just getting at with the capital spend. I'm just wondering as you all continue to see the improvement, I'm just wondering, how do you all decide between continuing potentially with the same capital spend and likely increase in production growth or, you know, maybe continuing with the same production and decreasing capital spend? Is it one or the other? Or how do you all make that decision from a higher level? Thank you.

Neil, thanks for the question. It's a good question. And I wish I could give you an easy always answer. But it's always a balance between those two areas And and taking in account a number of other factors. It's just not a one variable question. Or one variable answer that is price oil up or price oil down because we've often made more money in the bad times than you know, and more robust times, by taking on some projects when others out the sideline. A great example of that if I don't is going back in time to when we bought the Rodney Robinson lease and the Bonnie and those leases they paid out at $20 a barrel. During the COVID. Period, and that's one of the best deals we ever did. There's a time of worst oil pricing. And they've really kept kept giving, during that time and come forward the same thing can be applied to times where the drilling rigs were stacking up we've kept the same rigs for ten fifteen years or more. And have found that that's sometimes where you have good rigged hands good pricing on your rigs, good pricing on your completion, Is it time to build that foundation? So we talk about it in committee system, and it's pretty lively. About what we want to do. And who wants to do something slightly different. But we weigh when you start out with just $270,000, as I did, get to where we are today you can be sure you've had lots of discussions and thoughts about how much to spend and where to spend And we've kinda worked out a system among ourselves where we really try to stress test it. And and think about all the factors because there's other factors that weigh in on keeping a rig and keeping it going. What's gonna happen next year what is the quality of the prospects, and I'm pleased to say our geologists have really knocked it out of park on some of their ideas on grilling here and there. As y'all have seen, so we've had steady rise in our, our our engineering reports. And and reserve studies that we do twice a year for the banks. There's been steady growth there. And so the capital spending, is it something that we weigh by itself, but in connection with everything else, and the other capital request from midstream and marketing for example, is another area that they've come up with ideas and have pointed out, let's spend some money here on the midstream. And, of course, with the flow assurance, the added flow assurance that you get out of the basin, has been a lifesaver for us at times when the rest of the basin was more or less shut down. So it's it's a multifactor deal, and it's lively discussions. And I think I gotta give a lot of credit to all the guys on the team that are helping make these decisions. I think they've been very wise and is as Rob pointed out, look what it's done for our retained earnings. Over the last three and a half years, we moved from a deficit to over 3,000,000,000 and retained earnings. So, it's a pleasure to come back in light of those good decisions and say we're raising the dividend again. Which in fact is now the fourth time in seven years. And, you know, getting up there to three and a half percent or more, And, we plan to keep going in that direction as long as Chris and his team and Tom and his team and the midstream guys are all making these I think, very good capital decisions. So, I think you can expect more of the same in the same manner but we look at it more broadly than just looking at capital decisions based solely on oil price.

Yeah. And, Neil, this is this is Chris Calvert again. And I think Joe hit it on the head and just provide a little more color. I think, you know, when we look at specific project returns, you obviously, like Joe said, you have two factors really multiple factors, one that has really what we feel dislocated in the back half of this year, and that is the cost components to those returns. And so that cost dislocation can come from efficiencies, which we have proven to be extremely good at to where whether it's simul frac, triaml frac, U turns, the efficiency driven cost dislocation has been the large player in 2025. Now as we look into the back half of this year, we are able to take advantage of some more competitive service costs pricing. And so when you have the confluence of efficiency and service cost reduction, you can really tip the scale on project economics. Now I would also say that as we look forward, the tenant of what we have always operated on is optionality. And so when we look at this, it is October right now when we provide a more clear picture of 2026 in February, we have the ability to flex up, flex down, to to revise this soft for 2026 if market conditions have changed. And so I think that is something that is extremely important to where if we see this cost dislocation somewhat converge back, we have the ability to make that change moving forward.

Thank you. And our next question comes from the line of Derrick Whitfield from Texas Capital. Your question please.

Good morning, Joe and team, and thanks for taking my question. Good morning. Perhaps leaning in on some of the efficiency gains you've highlighted this quarter, where are you seeing the greatest opportunity for continued gains And more broadly, how much of your recent projected gains have been factored into your soft guide 2026?

Yeah, Derek. This is Chris Calvert again. From an efficiency standpoint, I still think there is there's always going to be ground to be gained. We have talked a lot about completion operation, trimul frac, 2025, we utilize those two processes on about 80%, 85% of our wells. There's still ground to be made to where we can get that number. Right now, it's about 40% for 2025. Look to boost that in '26. There's going to be logistical operations to where we can look to to utilize money. Partnerships with San Mateo play a key part in this when it comes to treated produced water and using recycled water for fracturing operations is going to be a large part of efficiency gains from a logistics perspective moving forward. On the drilling side, extending laterals, excited that as we move into the fourth quarter, we're going to some of our longest laterals today, 3.4 mile laterals at the AmeriDev asset. So something where we are extremely excited to bring some of that value forward. From an efficiency standpoint, it's really across the board with completion drilling, production, facilities, measurement that we look to push forward. Now how does that play into 2026? Everybody on the call is is very aware that this $50 price world that we live in is relatively recent. You know, it's probably within the last seven to fourteen days. And so when we've looked at how we guide from a cap perspective, you know, if oil continues to be in this $50 region, I think there's potential to where we could improve upon a D and C cost per full range that we guided $835 to $855 for the back half of this year. So I think any sort of service cost reductions from a $50 oil commodity world I think there's potentially grounds to improve upon. But I think from an efficiency standpoint, we started the year at $8.80. We're going to finish $8.35, $8.45, give or take. A large part of that is efficiencies. So I think as we look into 2026, we look to improve upon that number. And, like like we've said in the release, we'll turn in line a similar net lateral footage, but do it on a cheaper capital budget from a DNC or more efficient capital budget from a DNC side.

Thank you. And our next question comes from the line of Leo Mariani from Roth. Your question please.

Hey guys, want to to to harp on the the same, you know, sort of point here. But clearly, you folks do have flexibility in your plans, which you certainly spoke to that you certainly could adjust some things, you know, come kind of formal guide. In February. Wanted to kind maybe get a better sense and terms of the variables that you guys are looking at. A number of folks out there are expecting kind of an oversupplied oil market in 2026. Just want to get a sense of how much kind of the oil macro kind of plays into your thought and I know you've certainly got some returns here, but if oil goes another leg lower here, is there kind of price level, where you maybe decide not to grow so much? Would that be kind of in the 50 to 55 range? Just trying to get a better sense of how you're kind of thinking about oil macro and how that factors in your decisions here on spending.

Yeah. Hey, Leo. That that is a great question. You know, I think as we look it'll go back to Joe's answer. I think it was on on Neil's first question. You know, I think that's a story that we unfold and we tell when we live in that world. You know, as we get closer to February, if commodity continues to slide, I think that's how we have to approach it. And like Joe said, done at the committee level here with all teams participating with with board contribution, and it's really an internal discussion. However, think as we look at that, the optionality that we maintain, whether it's at the rig level, even more flexibly at the completion level that we are able to to reduce activity in that world if cost don't continue to go down in that in that reduced commodity price. And so I think that's how we would kinda look at it, but it is not a single variable. And so I know if Joe or would like to chime in.

Look. Chris, yeah, those are all good points. But remember, that if we don't look just at the oil price, one factor that has influenced us and made us more active is the fact we've reduced days on well that if you drill these wells faster, you save about a $100,000 a day. And that makes it big difference in looking at your rate of return. So it it as each day you save, you improve what makes sense to drill. And what particular rate of return. This second thing that I'd say is that the the drilling companies use Patterson more often than anybody else. And Patterson is making improvements all the time on their equipment, and there's people. That you have that also creating the efficiency. So price some drops in price can be replaced by efficiency gains. But also these wells are gonna produce for thirty years. So to look at it just on the price of oil, what the price of oil is today, is narrow minded Because, again, I point you back to the Rodney Robinson Wells And the other wells we drilled in the COVID period, you had low oil prices then, but they were paid out within a year. The on the strength of its production, the low well cost. So they're just these other factors have to be not weighed once, and then you wait six months to drill the well, they're may close in time when you spud, and you can always postpone it. You can just say we're not gonna do it now. And if you have a long relationship with that service company, they'll they'll work with you. They don't wanna lose the business. So everybody works together on these things to do it. At or more or less optimal times. So the capital decision really isn't the one that drives it so much For a company like us that have the capital resources, do. 2,000,000,000 on our line of credit, know, paid down debt. To a small amount, it it really is a larger question on that is what efficiency gains taken into account what efficiency gains what these other costs are, and cost of product. And I really commend Chris and his team for reducing that where you're your per foot cost is less now than it what know, it's considerably less, in my mind, you can save $60,000,000 has to be taken into account on the decision. Do you go ahead with this capital spending now thinking that anticipating that with the efficiencies and the like here, you're gonna still come out ahead. And and they're gonna use their best equipment and best hands And, they they all know that reducing cost is a is there major objective and ours is working for the long term, and we're not spending just to be spending. But we're spending fully intending to make money. And you can see that by the number of shares as participation by our employees in buying buying stock in the open period. So I feel real comfortable that everybody's taking things into account and pointing out the positive. Of drilling these wells or doing other capital events at the same time and coordinating it So it's a balance between what the choices you have, to drill or to acquire properties or use them to keep building out your midstream, which he's worked at to be a real good deal. So we have a lot of opportunities, a lot of choices. And, there's a lot of thought and effort put into it. Yeah, Joe. This is, Brian Willard, exec vice president of midstream. I think you're exactly right. You mentioned the midstream business and, just a couple items on that. That business is before extremely well. We had a new processing record last quarter. 533,000,000 cubic feet per day of natural gas was processed. And we continue to have that success as we we get into the fourth quarter. It's been a great start to the fourth quarter. And not only is the business performing well, but we've talked a lot about the different options with that business because we don't believe that the value of the midstream is fully reflected in Matador share price. And so we continue to explore the options and and we can be patient there. We don't necessarily have to have that money as Matador, so we can be patient and make sure it's the right opportunity and the right transaction a matter of our shareholders and provide the most value. Maybe the last one I'd make is just Matador also has some wholly owned assets. That they retain and they continue to operate. And those are assets that we acquired in the advanced acquisition and the Emerative acquisition. 250 miles of pipeline altogether. Great assets. And those assets are about 30 to $40,000,000 this year, and EBITDA is what we expect. And we also, next year, expect it to to be between 40 and $50,000,000 in EBITDA for those assets. So those are great assets that we could could drop down eventually down to San Mateo with the right situation. And know, it's a great business at at San Mateo. And and the midstream business because it's a fee based business. It's something that, you know, despite the ups and downs of commodity prices, we continue to get the the fees from our customers, including Matador, but also including third parties. Know, it's been a great year for third party. We've had a new customer on the oil side, and we continue to expand the relationships with our existing customer and repeat customers as we move forward. And so the midstream business continues to perform very well. And that relationship and partnership with Matador, the team there, and and and team here at San Mateo This really is a benefit that that I think is hard to replicate and very unique Matador and its shareholders.

This is Greg Krug, EVP of Marketing and Midstream Strategy. I just wanted to pile on a little bit as far as the midstream business is concerned. As as Brian mentioned, as far as it is a a fee based business and not commodity. So these lower commodity prices do not have an effect on on the on the fees that we get on San Mateo. Also, I wanted to point out that know, as far as flow assurances, we parked on that every time have an opportunity to do so just because it is so important. To to Matador and to our third party customers. And, we feel like we're a step above, some of the other third party midstream companies just for the simple reason I mean, we're we're tied to those with some of our midstream or or wells at Matador, those other companies. And they're they're just not as reliable as as we are. We feel more comfortable with going to, the San Mateo and and Matador owned systems. So I think that's a huge a huge factor for us as well. And this this is Brian Willie. One other thing to add, if Slide 12 actually shows an outline of our assets. You can see the 50 miles of pipeline, the seven twenty million cubic feet per day of processing and and I think just generally, if you just look at the slides generally, if somebody took a minute to look at the slides, you'd be able to see what a great job Matador is doing altogether. And what a fantastic job that that we're doing. And so you know, I think if if you haven't taken the time to look at the slides, I think great opportunity to be able to look at those and get a great summary of the progress that we are making at Matador. And so now this slide 12 has Matador wholly owned assets. You can see those in blue on the map. But even all the different slides, they just really summarize the great progress that we're making Right. I hope that answers your question. But another thing to look at is that, look on slide number four. And you can see the progress we've made over these twelve years since we went public. In in this matador. And you know, where we sit and why having that midstream to service our area. And the other midstream companies have been very cooperative. We've all tried to cooperate with each other on offloads. So there's good having the midstream gives you puts you in that club where everybody helps each other. If if some is down for maintenance and wanna thank everybody for the way they do that. And get gas out of the market. Greg, you wanna add to that? Yes. I do wanna say I had a shout out to our third some of our third party offloads that we have. One of which is I wanna congratulate MPLX for their acquisition of of Northwind. We'd be we're gonna have a long relationship with the NBLX, and we're looking forward to working with them further on our North the Northwind asset and the the fact that's gonna be a solution for us for our our shower, our sour gas and c o two. And I might add as far as enterprise is concerned as well, you know, with their acquisition opinion, We'll have we've got quite a bit of of gas dedicated to them as well, and we look forward to that. We're also doing quite a bit of business with Target and, so we're, we're looking forward to doing additional business with them. And we've got a great relationship with all those folks. So Hope that answers your question. But if you need more, we, again, invite everybody on the call to come see us. We'll devote more time to you and to see our operation because there's aspects of our operation such as our MaxCom room, which is monitoring all of our drain activity. That has added to the efficiency gains that's led us to lower prices, which is opened up the door to more capital decisions. And and adds to the long term nature of what we're trying to establish in New Mexico.

Thank you. And our next question comes from the line of Noah Hungness from BofA. Your question please.

Good morning everyone. For my question here, was hoping to kind of ask the on water handling. We've seen a lot of activity in the water handling sector this year. Obviously, San Mateo has a large watering handling business. And as you guys continue to leverage Trimofrac and Simofrac operations, it seems to be playing a increasingly important role there. But I guess, could you maybe talk about just general growth aspects for that company or growth outlook and how you're thinking about that business today?

Yeah. Hey, Noah. I'll I'll start, from the Matterware side of things, and then and then Brian can also talk about it from the San Mateo side. But you know, next year, there is gonna be we're looking at roughly 40,000,000 to $50,000,000 investment in Matador's wholly owned midstream business. And a lot of that has to do with the build out of our water gathering system, both in the Ameridev area and in our Hat Maes kind of Ranger area. And so, of because that investment is really talks to speaks to the integrated nature of of of the upstream business with the midstream business. And to be able to provide an increased percentage of produced water for these intense hydraulic fracturing operations. Chris talked about of the efficiency gains that we've seen in that realm. And and, I think it is a great example of us working together to increase the amount of produced water It lowers use for hydraulic fracturing operations, which reduces our lease operating expenses. And it reduces the capital spend for the on the frac side. And so, there is an investment there. To to increase our watering handling capabilities.

Thank you. And our next question comes from the line of Jon Abbott from Wolfe Research. Your question please.

Thank you very much for taking our question. Question is going be on natural gas pricing. I mean, we did see some negative Waha negative during you know, the October. And then and then as you sort of look out in the Permian, could be additional takeaway capacity you think that gets filled So I just really sort of like, how do you think about gas pricing in April? And then how do you think of gas pricing longer term Do these pipes get filled? How do you think as you sort of report on a two stream basis? How do you think about the gas price? In your realizations?

Hey, John. I'll I'll start if if Greg and Anton wanna to pile in here, that's great. But yes, so in Q4, we as we highlighted in the release, we did elect to curtail some wells for a few weeks during this long haul maintenance long haul pipeline maintenance period. And in doing so, we avoided paying those those kind of deep negative, Waha pricing. I I do think it speaks to Matador and our ability to be nimble. And and make sure that you know, we have that lever as an as an option to pull, in this in this sort of environment. And and, you know, we saved a lot of money in doing so and really just just deferred that production to, you know, where Waha prices are positive as they are today. And then on your question, about these long haul pipes that have been already decided to be funded for building. You've got you've got Hugh Brinson. That's coming on later this year and Blackcomb and GCX expansion, all of which will add roughly four Bcf towards the latter part of this year. And so we do think that the longer term view of and really, I mean, just twenty '26. That the capacity you know, issues, if you call them, in the basin for Waha will be a leak be relieved by those by those pipelines.

Yeah. The other thing, Glenn, is to mention weather still plays a role in the gas pipeline business. And so you hit October each year or September, you're faced with this risk. You wanna be sure you have the you know, the balance sheet that you can work through those those periods. And the the second thing, is that that solutions are coming that the industry midstream industry, is is very responsive to this and finding ways out. And I'm pleased to that report today. Anton, you have a better handle, but price it gas or the selling price is a buck 50 now. This is Anton Langland, executive vice president of marketing. Is correct. Cash has gotten a little bit stronger out there as well at Waha, and we anticipated of this, and so we went out and put in hedges 2026 where we have a big hedge position to protect downside risk on Waha. As we know, all these pipelines are coming online in '26 We'll have TCX expansion mid twenty six for half a BCF, Blackcomb will come on for 2.5 BCF, and Hugh Brinson will come on at 1.5 BCF. And that's all gonna happen in 2026, which should alleviate of this pressure downward pressure on Waha prices. Going forward when you start looking at the '26 and the '27 should be a great time for Waha production and our gas and give us a lot more opportunity to produce more of our gassy wells that we have in inventory that we haven't drilled yet. Because of these lower gas prices. But in '27, '28, we'll have a lot of opportunity drill a of gas here benches out there.

Thank you. And our next question comes from the line of

Yes. Thanks for taking my question. I wanted to ask on well productivity Just looking at the publicly available state data, your well productivity on a per lateral foot basis is down a little bit year over year in 2025, though relatively in line with where you were in 'twenty two and 'twenty three as 'twenty four was a really strong year. I know there'll always be some variability in productivity data just given the geographical mix of wells and various lateral lengths But could you talk a little bit about your expectations for well productivity going forward and how you see that trending into 2026?

Hey,

Thank you. And our final question for today comes from the line of Kevin McCurdy from Pickering Energy Partners. Your question, please?

Hey, good morning. Thanks for taking my question. Just continuing to touch on the midstream angle, what is the impact of the increased activity on the San Mateo volumes and EBITDA outlook? Thanks.

Yeah. This is Brian Willig, Executive Vice President of Midstream. You know, it it that partnership we have with with Matador is critical to us. It's about, you 70 to 80% of our revenues come from Matador. And so as Matador grows, oftentimes, that leads to growth at San Mateo as well. Just depending on where the growth is. So I think we'll have more to talk specifically about that, of course, next year when we lay out our plan, but, that's a great partnership that we have with Matador. And it's something as you as you look at the capital expenditures for next year, Glenn mentioned earlier the Matador owned capital expenditures. I think we had mentioned in the release the eight to 12% tablet venture increase Approximately 90 to a 100,000,000 of that is is midstream, whether that's San Mateo and our shares of 51%, whether that's Matador owned. And so you know, we have some really great projects on on tap for next year to continue to grow the company. Continue to expand the business. So we support Matador.

Thank you. Ladies and gentlemen, this ends the Q and A portion of this morning's call. I'd like to hand the call back to management for closing remarks.

Thank you very much, and thanks thank you everybody for spending the time in here with us. And again, I repeat, if you want more information or have more questions, you'll find us successful. Rob will be happy to take your questions and get answers for you. And we try to pride. I came didn't come up through private equity, but came up through friends and relatives. And with friends and relatives, they have a higher standard for communication and being accessible, and we wanna make that. You know, a lot of people, as I said, I think one of the issues just confronted directly, is quote, capital spending. Are we outspending our cash flow? And I think the answer is clearly not. If you don't believe the accounting that we've grown from a deficit to to over 3,000,000,000 having made good decisions, then look at it this way. I've never sold a share of stock in Matador. And we have a whole group of executives that haven't either. And the far as the employees go, we have a employee share purchase plan with over 95% participation. So the one the the people that know the company best we're we're buyers. Basically, not sellers. And, we can see the future coming up. We don't look upon it We look upon the more upon the quality of the rock and quality of the operations as opposed to what the oil price. Per barrel is. Because you can have a, a very high oil price, and the capital decisions. They don't have good operations. Or something else can affect it. That they're spending too much on their bank debt. And are in a bad position. But over forty years, remember, we started with just that 270,000. So over forty years, we've grown to this point. And it's from having a good decision making process. Not that we've never made a bad decision, but not many of them. And made a whole lot more in times of of oil price being shaken for one reason or another. And and I pointed out some of those instances. But if you keep going, and be that much more selective in your decisions, you can build an organization and there are more good people become available, And, it's worked to our advantage. Not that I've welcome $50 oil for a sustained period. But it's not fatal either. If you've maintained your balance sheet all through time and your bank relationships. You just have to be a little more careful. The midstream has helped. Because it's a fee based it gives us further balance. So as we say around here, we like our chances. And I think if you come to visit and meet the staff, you'll say these are people I could trust with my come on, say it's your life savings, but you could trust your investment because we come along a long way. You got a forty year history to look at. And we're pretty optimistic and we see the opportunities growing for us. Rather than being reduced. And and I think this this period going into the fourth quarter frankly, we've never looked so good with more options than we had before. And and and more targets of opportunity. For 2026. So we're we're excited. But I do think that helpful as these questions are on these kind of calls, it's even better to come see us. Have breakfast or lunch with us, or even dinner and meet the people behind these capital decisions. And say that, hey. They're they're reasonable people. They're professional. And they wouldn't be spending the money on this well or that well. If they didn't have a high degree of trust and confidence in it. And I think that's what you get for investing in Matador. We do have a sheet that says why Matador? It's at the back of your of the earnings release. And really encourage everybody to look through, those exhibits And I think they tell the story in five to ten minutes of why Matador. And an original investor in First Matador was in at 85¢. I mean, you know, sold for $18.95. And an original shareholder in this Matador is in for $3.56. So it's come a long way and we like our chances. And, better today than than ever. And I think we thank the board for working with us. We think they're distinguished and it's a good process. We rank up there Van can tell you more where we rank in New Mexico, but it's a top five top 10, type of companies. So start out with, you have on page four, how little we started with. Back in the early nineties to where we are today. So please give it serious consideration. And if you're want more information, we're here. And if you want a personal in person discussion to if that would give you greater comfort. Just give MAC a call. And he'll schedule it. And we'll enjoy meeting you. We would like to wish we could meet every one of our shareholders. So they would have that personal relationship. So thank you very much for your attention today. And come see us. We like our chances. And, we feel very comfortable that next year is gonna be a a good year for us one way or the other.