Mac Schmitz - Head, IR Joe Foran - Chairman & CEO Matt Hairford - President David Lancaster - EVP & CFO Craig Adams - EVP, Land, Legal & Administration Brad Robinson - VP, Reservoir Engineering & CTO Van Singleton - EVP, Land Billy Goodwin - VP, Drilling Gregg Krug - VP & Head, Marketing, Midstream Matt Spicer - VP & GM, Midstream Trent Green - VP, Production Rob Macalik - VP & CAO Ned Frost - Head, Geoscience Group.

Neal Dingmann - SunTrust Irene Haas - Wunderlich Dave Katz - JPMorgan Scott Hanold - RBC Capital Markets Mike Scialla - Stifel Jeff Grampp - Northland.

Good morning, ladies and gentlemen, and welcome to the Third Quarter 2015 Matador Resources Company Earnings Conference Call. My name is Shinise, 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 Monday, November 30, 2015, as discussed in the company's earnings press release issued yesterday. I will now turn the call over to Mr.

Mac Schmitz, Senior Financial Analyst for Matador, who also manages the company's Investor Relations. Mr. Schmitz, you may proceed..

Thank you, Shinise. Good morning everyone and thank you for joining us for Matador's third quarter 2015 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 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, its most recent Annual Report on Form 10-K, and any subsequent quarterly reports on Form 10-Q. I would now like to turn the call over to Mr. Joe Foran, our Chairman and CEO.

Joe?.

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.

In addition to our earnings release issued yesterday, I would like to remind everyone that you can find a short presentation summarizing the highlights of our third quarter 2015 earnings release on our website at www.matadorresources.com on the Presentations & Webcast page under the Investors tab.

This eight page summary is intended to supplement and try to improve that will make more meaningful the information contained in this news release then hope that you like it. If so, please let Mac know.

Now, I would like to introduce the senior members of our operating staff joining me on this call this morning, who are standing by for any questions you may have.

They are Matt Hairford, President; David Lancaster, Executive Vice President and Chief Financial Officer; Craig Adams, Executive Vice President of Land, Legal & Administration; Brad Robinson, Vice President of Reservoir Engineering and Chief Technology Officer; Van Singleton, Executive Vice President of Land; Billy Goodwin, Vice President of Drilling; Gregg Krug, Vice President and Head of Marketing in Midstream; Matt Spicer, our new Vice President and General Manager of Midstream.

So this is the promotion and this is his first duty as a VP answering questions. So feel free to test him out in this pitch. Trent Green, Vice President of Production; Rob Macalik, Vice President and Chief Accounting Officer.

The third quarter of 2015 was full of milestones and achievements for Matador and I would like to emphasize three key points to note on this call before taking your questions. First, this year, 2015, will be one of the best two to three years in Matador's history, despite the lower commodity price environment we have faced.

The Board and the staff are doing very well on the factors they can control.

For example, this quarter was the best quarter we have ever had in terms of total natural gas production, and our second best quarter ever in terms of total oil production, and our total BOE production year-to-date has already surpassed our record BOE production for all of 2014. Second, the Delaware Basin opportunity set continues to impress us.

We have now tested at least 11 producting horizon in the Delaware where we are seeing improved oil and natural gas recovery. Drilling time and overall well cost continued to improve significantly and help mitigate the lower commodity price environment.

Finally, third, our successful Midstream business, consisting of natural gas processing, salt water disposal well, oil, natural gas, and water gathering systems are continuing to add value to each Matador share of stock both as an asset of the company and as a way to cut cost and make our oil, natural gas, and NGLs more available to the market.

With that, I would now to like to turn the call over the operator for your questions, Shinise..

Thank you. [Operator Instructions]. Ladies and gentlemen, due to time constraints, we ask that you please limit yourself to one question and one follow-up. Again we ask that you please limit to yourself to one question and a follow-up and so all have had a chance to ask a question, after which we will welcome additional questions from you.

Our first question comes from the line of Neal Dingmann with SunTrust. Your line is now open..

Good morning guys. Say Joe for you the team may be start with just the first Midstream question, you mentioned in the press release about doing something and building something out now rest of rigs, processing trial now which should obviously have some size to that.

Could you talk about timing and potential size or again how quickly that could come on?.

Those -- all those questions are being decided now. We expect the plant to be bigger and better than the plant that we had in Wolf. There is science you learn on any construction project, you want to take those lessons learned out there, it will be bigger, we want to give a lot of credit to EPC for the way they work with us in both places.

And so that design phase and that construction phase is happening right now locating the property doing all those steps. So it's still in the formative stage, Neal.

All that I would say is that we think that we believe or no we're going to build something bigger and we believe that we can make it even more efficient than the other plant, which is doing very well on its recovery.

So very pleased the way that started right out of the box and really it operates from day one with outside of the valve that may be replaced, it's been on, the design has worked, but we still think there we can make it little better than that..

Yes, hi, Neal, it's David. You mentioned about timing and I think as we put in the release, our goal is for that to be on by mid-year, next year. So sometime in the third quarter, we think that that plant will come online rest of rigs..

And David, that would be to fund out with a separate credit facility around that at least partially..

Well I think that actually we have a lot of optionality there, Neil. We're certainly as we mentioned going to visit with our lenders about putting a separate credit facility in place and I expect that we will do that. They're interested in working with us on that.

But as we've spoken about even with the first plant there were lot of options for us in terms of other third-parties that were interested in financing or JV-ing with us on the plant. And I think it's still early. We're still looking at various opportunities but certainly we're going to work with our banks to put the facility in place..

Understood..

Neal, it's Matt, I'll just jump in here with Joe and David, and we're just trying to mention the strategy around this plant. We're very similar to what we had at Wolf; we're servicing Matador's needs first. We've got -- the plant is going to be a little bigger because we're going to add little more gas volumes but the strategy is the same.

We're building it for our own use, first and foremost, and to make sure that we're able to additionally process our gas..

Yes, Neil, that's a great question, and I do want to underscore what Matt say in there, as you know, the gas out there in the Delaware is 1,200 BCU or so, so it's too risk for pipeline quality you got to process it, to get it in, to the pipeline.

And so it's necessary and as Matt said, operate in our sales and having that capacity we can lower cost and get -- and obtain priority on takeaway of the gas. So and David is right too, that there's just a lot of options there.

So it's a complex decision but we like our position and we like the options it's some really good choices that we have ahead of us..

And one last one, if I could, Joe. I know you've had some fantastic -- continued to have fantastic results at Rustler Breaks and Ranger.

Just your thoughts on drilling plants originally and the excitement level of other areas may be like Twin Lakes and some of these other areas that you haven't drilled as much yet?.

Is that -- we're -- we've studied the Twin Lakes well. So that's being -- that's going to be tested as we said. What we're doing to do, we will drill on a pilot hole there and obtain the data and as we always do, we're going through it very methodically. So but we're excited to have that drilling now.

Rustler Breaks and Arrowhead are continuing to be focal points. We try to provide information in their of a number of non-operating wells that we are participating in, in the Arrowhead and Ranger area, and the advantage of participating in these, these are derisking a lot of that acreage for us where we have not had to do so.

We like that area very much it does require more work, because the interest to more fractioned, and but we're proceeding steadily along.

David, you've anything to add?.

No, I think you covered it very well, Joe.

I'd just say that I think the technical teams here continue to be very excited by the opportunity that we see across our acreage position and I think you can see by the map that Joe was referencing that we have put in the presentation that really from the south to the north of our acreage we're drilling exciting wells whether they would be Wolfcamp wells or Second Bone Spring or Third Bone Spring, or As or Bs there is opportunities all across the position.

And so I think we still have a very high level of enthusiasm beyond should I've said to you and others I think that the company is in a great position right now and it's really got one of the finest opportunity sets in front of it that we've ever had, probably that we have ever had. So we continue to be very excited about what we've got..

And, Neal, just so you know that the non-ops on that presentation that's on our website under the Presentations tab. So try to make that easier for you it looked to me at what non-op activities we have going on..

Our next question comes from the line of Irene Haas with Wunderlich. Your line is now open..

Hi my question is focused on Arrowhead. It looks like you have had a really nice Second Bone Spring sweet spot.

Just wondering whether there are other horizons that you are interested in, and then when you guys get ready to drill next year do you have ideas other than what your competitors are doing right now because usually Matador had its own twist in there and also lastly how is the infrastructure situation at Arrowhead?.

Let me begin by letting Ned Frost Head of our Geoscience Group just address them with multiple horizons..

Yes, hi Irene, Ned here. The Arrowhead acreage is you hit the nail in the head looks quite good with Second Bone Spring and I think that's probably what we will start out with up there is it's looking at that. But we think there are certainly other horizons to look at potentially First Bone Spring and Third Bone Spring up there as well.

We are exploring the Wolfcamp also, I think that be a little bit further down the road for us..

Avalon too..

Yes, and potentially Avalon keeps contact our range of Arrowhead team leaders is weighing in on that as well so there is Avalon potential up in that part of the basin also..

Would the Bone Spring get a little guess here?.

Just looking at that way..

Any Wolfcamp. Would the Wolfcamp --.

Yes, I think actually, the -- sorry, Irene, go ahead..

I'm sorry, if you were to pursue the Wolfcamp would there be guess here in main, just curious?.

I think that that we feel like Irene from what we've seen that the Bone Springs wells up in that area and you can again see if reflected on what we've shown our experience has been there 80-plus-percent oil, a lot of the wells tend to be 90% or better. Our Ranger well, our Pickard well and even some of the CTA State well that we reference are 90%.

I also think that we feel like that the Wolfcamp will be oiler as we go to the north that that way. So I think our expectation is that we would -- we will see more oil as we go to the north..

Yes, all way in, Irene, this is Brad Robinson. We've mapped gas filled ratios for all the different zones across that area and I will just agree with David that particularly the Wolfcamp is that part of the basin is very oily much different than the southern part of the basin.

And so we do expect the Wolfcamp and Bone Springs, Sandstone oil all be mainly oil productive up there..

And what's your AFE?.

Sorry?.

Cost estimate..

Cost, yes?.

Yes, so I think Irene that up in that area we're probably looking at Bone Spring wells and $5.5 million to $6 million and it gets a little bit more expensive as you go towards to the east, because it gets a little deeper and then the Wolfcamp would probably be incrementally about $1 million higher than that..

Okay. Great thank you..

Irene, this is Matt, you've been asking question about infrastructure. And as we talked about before most of that acreage in Arrowhead is held by production. So there is a significant amount of shallow production in the area. Therefore the infrastructure is in place.

That being said we will do the same type of valuation that we did at Wolf, we've done at Rustler Breaks in regards to what infrastructure we need to put in place whether we need processing, dispose or whatever we need there we will evaluate that as we get close down..

Our next question comes from the line of Dave Katz with JPMorgan. Your line is now open..

Just wonder if you could start may be on the Scott Walker well and have results compared to your expectations?.

Well, I might start out and then will pass it around the horn, Dave, but we were pleased.

The Scott Walker start out is really a data point well that we were just going to drill a pilot hole and then as we drill into that we saw a number of grounds that we liked and elected to test the Wolfcamp for strategic reasons because as far north as it was if it was successful in the Wolfcamp then you proved up the all layer from north to south.

And so we were very excited when we complete it, we made all well out of it. The IP is not spectacular but that one the point of drilling to the Wolfcamp it was to confirm the oil presence and we have been pleased we would describe it as a real solid well that held up very well and there are 300 barrel of oil a day range.

And in addition it validated we had a 640 there from the state so about one well will hold the whole 640 the other zones that we will drill will be optional.

And we think in the Bone Springs it had a couple of -- if you just drill on that well alone you would have probably completed the Bone Spring because there is couple of very good looking zones but we wanted to try the Wolfcamp and we feel like it really answered the question that opens up that whole area not only for drilling but also for infrastructure..

I'll jump in here, Joe, I think what you said is exactly right. What it does with the wells we have in the south and this well on the north end it pretty much proves up all at acreage from north to south.

And additionally in regards to the infrastructure it gives us some communications on what we need to build and where we need to build it and we get started on that sooner than later and have the entire acreage position ready for drilling..

Yes, this is David. Hi, Dave. I would just toss in that because it was an important well from a data standpoint for us too when that we were able to drill a pilot all the way through the Wolfcamp B in that well and had some nice shows in the B some things that were interesting.

And in addition, as Joe mentioned some really good looking zones in the Second Bone Spring and even the First Bone Spring. So overall I think we were pleased. We did elect to complete in the Wolfcamp A in order to see if we could ensure that that play was going to work all across the acreage as Ned said I think we have.

So I think we thought it was a good well.

Ned, you want to add anything or?.

Yes, I mean I'd just reiterate whatever we said I think taken an isolation that resolve we are happy with how that well is performing it's certainly not the exact same as staggering to car. But that's part of understanding the acreage out there.

And really that was a quite a large step out for us and I think a very important test for us as ever body is alluded to thus far. And really it's think the further north that anybody has tested the XY stands in any county and potentially in Lee County as well.

So for us again that hammer this point home is just really is giving us a better understanding of what the landscape looks like in Rustler Brakes. And again I mean Third Bone Spring looks perspective, Second Bone Spring looks perspective, potentially Wolfcamp B as well so I think it's quite an encouraging result for us..

Appreciate the color guys. Just one follow-up if I could. May be just switching over to Northern County specifically Jackson Trust, any initial thoughts there on that three well batch.

And I would think completion taking out but any thoughts on those shallower targets?.

Well, I think that we were very encouraged as we drill through the wells, Dave. So we did the wells in a batch mode so there are all three off the same pad it's -- so they are all wrapped together, one Brushy, one Avalon, one Second Bone Spring.

It is of course our first step to the Brushy and the Avalon, in this area but we're encouraged by the results of some of our peer companies around that area. We have just finished fracking the wells and getting the plugs drilled out.

So I don't think it will be too much longer until we begin to be able to be able to flow back the wells and see what we have there but we are encouraged and be proud to see the results..

And this is Net Frost again. When we are drilling those we ran a mass backlog so it's giving us an indication of hydrocarbon and hydrogen both present in the mud screen there and we are really getting quite good here at Brushy Canyon, the Avalon, and in the Second Bone Spring.

So we are quite prepared to what we thought even while drilling most of the data we collected some pilot holes come up with these three wells, they look quite good. So we're looking forward to getting these online..

Our next question comes from the line of Scott Hanold with RBC Capital Markets. Your line is now open..

So in looking on your map on page 6 I mean certainly you've got a pretty good delineation in terms of kind of some of the extent of your acreage obviously the Scott Walker well on to Loving and some of the stuff in northern Ranger.

When you look at your budget for '16 and sort of this case you laid out that the kind of prevailing oil prices that if you're running three rigs, what should we expect for 2016, is it going to be more, a lot of delineation yet going on or there could be more of, really trying to focus on what your best rate of return opportunities are?.

Scott, it’s going to be a mix and your three existing rigs are state-of-the-art and they were set up for simultaneous operations of walking packages.

We're going to endeavor to put them in situations more and more for its development on the same pad, somewhat like the Jackson Trust where you've three wells drilled from the same pad or in the development drilling rig was over for the most part.

And I would say daily if we could, we will have one in Wolf, one in Rustler Breaks and one in work in Arrowhead, Ranger area but they will move them between those areas as needed and looking for efficiencies there but our daily one would go in the other.

And on the delineation phase is we've done a lot of that work, there is a lot more has to do because there are a lot of more zones are involved today and what we have originally thought but that is days having those rigs with simultaneous operations, we can do more of that.

So I would say that think of it in terms of we’re going to be moving increasingly to development and delineation will come down with as far as these three rigs, now oil prices should surge and start to move up to the $60 level if that occurs then the likelihood of a fourth rig will increase too as we go over $50 a barrel and approach $60 if that scenario happens.

But that is probably -- most probably won't be state-of-an-art rig like that, it could be more of a rig, that's easy to move, won’t be as expensive to drill the delineation wells. So Matt did I say that right or --.

That is right, Joe.

In regards to this other rig which is knocking about what we would do is we put together a rig that would have a lot of the operational efficiencies of the higher pressure the 7500 horsepower pumps would be critical to time off capabilities would not be so critical on that rig but as high as the lots of things to do in 2016, Scott, and even in regards to the vertical on safety we got that's part of the delineation and development process it's for us to figure out vertically how to space these wells if the well slows down and we're headed down that road as we speak and got some test going in various areas on spacing, so that will be an important part as well..

Yes and I appreciate all that color and I guess in more specific to the point I was trying to get at is you think at some point in this mid or late '16 where you guys can step back after all the work that you've done and your partners done you can say okay in the Wolf area, we’re doing pad development, our primary target is going to be on the Wolfcamp, this Wolfcamp formation in Rustler Breaks this is what we're doing, this is our primary target.

Did you sense in the next call it 12 months will be to that point or is that there so much to do here that it could take a little more time?.

This is David, Scott. It’s an interesting question. But I think it could be a little bit different than what you propose, I’m not sure that we would necessarily look at it in terms of just drilling multiple wells to the same formation all the time but we might be looking more at moving from pad to pad and drilling multiple stacks of wells.

So I think that will be part of the discussion that we’ll have going forward. Now we’ve done that in kind of two or three well batches, we’re about to embark upon a program, in the Wolf we're actually going to drill four, from the same pads stacked.

And so I think as we move forward there may be more the potential for us to having a large pad from which we drill multiples of wells and as opposed to drilling all of one formation and all of another.

But again that’s just going to be a function I think of us beginning to understand what’s right in terms of the spacing both horizontally and vertically on the stuff..

I wanted to thank Scott.

A little footnote on that is when you’re drilling on the stack, you may be able to try and see exactly how much savings you have because you don’t when you’re drilling from the same pad, you’re not having to move the rigs, you’re not having, you saved money on logging, there is a lot of little ways to save many that may that don’t cut back your recoveries daily just makes it less expensive to drill and faster to drill because you remember a lot of the savings that we’re achieving on drilling has come from cutting down the number of days on well.

And it’s just not just coming from service cost reductions but the true efficiencies of reducing drilling times and being able to do things that don’t require expenditures. You get your logging down program or you don’t have to do that the same way every time..

Scott, this is Matt. I think also when we get into this development phase that David and Joe are talking about then we can utilize this simultaneous operations capability with drilling.

So will be, well we will be drilling four stacked laterals we can also be completing as we're drilling which will do for [indiscernible] versus having to go in and drill all four of them and complete them after the drilling has been done..

Okay. And I appreciate all that color and by my math I ask 1.5 questions because I kind of extended the first, I’m going to try to sneak another one in here and may be test Matt on the conference call here but infrastructure is obviously in the Delaware Basin is going to be important then you guys obviously have been trying to get in front of that.

Can you kind of discuss, bigger picture long-term what you think your greater infrastructure needs are obviously Rustler Breaks is the next, the current focus both where do we move from there and how much more is needed and if you could just part of that talk about like how much capital and with our receptiveness how you’re going to fund the gap but how much capital is going to be required kind of see this build out over the next few years?.

Well, Scott we’ve not taken it that far, the first is trying to determine needs is Matt tried to make the point, we’re not doing this to go in both the Midstream business, we are trying to do it as a necessary adjunct to our own exploration and production activities because as I mentioned the gas is not top-line quality because you’ve taken out some of the fluids.

But the other parts of our Midstream are salt water disposals; there are not lot of salt water disposal wells out there that can handle this.

So you need to do it yourself, now our staff kudos to our staff, they figured out this water is potentially compactable with our frac operations and they are recycling the water in such a way that we're saving a lot of money on our fracs from having this water recycling that and then we’re taking on some third-party water and making a little money from it.

It helps to underwrite and further reduce this cost. So there is a number of these factors here and it’s really hard to determine because we can’t predict who else is necessarily building power plants or gathering systems or salt water disposals that is kind of as we have taken up, as we go through.

The cost of planning is not very much and so we -- it’s easier to plan for all of this and if someone doesn’t step up, we’re going to be ready to move ahead but it’s going to begin to be on a selective basis that is additive and enhances our Basin core exploration and production.

As an example, we want priority on our gas going away, so it doesn’t get flared, well you have a better chance of that when you operate your own plant.

So you probably make the analysis, this is like be a cotton farmer, if you're a cotton farmer and you also own part of the cotton gin, you have a better enterprise then if you limited your ownership to one or the other. So the deal the way it works, it didn't have the Midstream guys come in and say hey I’ve got this project.

The Midstream is done in conjunction with what Matt and Billy and the team leaders are doing and trying to coordinate that why.

So I know it’s going to be an active part, we are committed to building the plant, haven’t fully decided how large or but that was one point in drilling the Scott Walker to say if we want to extend it out north which appears to be that something that we want to do.

So that’s underway right now hard to say but I think Scott will have a lot better number at Analyst Day that we expect be late January, first of February and I think we did indicate it there, David?.

And that’s right I think you answered that question very well and fairly I don’t know but I could improve on that, so..

He didn’t always say that..

Always you don't. Sounds good..

Sounds good..

It tend to be bonus time, Scott, so..

I’m glad this call is being recorded..

Very good you got proved off, all right, fair enough guys. Thanks..

[Operator Instructions]. Our next question comes from line of Mike Scialla with Stifel. Your line is now open..

You mentioned in your release, I guess I called a base plan maintained in the three rigs next year, if oil prices stay about where they are now, what does that, does your modeling say production does under that scenario?.

Well, hi Mike, it's David. I think that we expect to have probably on the order of plus or minus 10% oil growth under that scenario and on the natural gas side we may be fairly flat from the standpoint that Chesapeake has actually drilled a few more wells this year than what we had originally anticipated.

So I think that can be evidenced by the fact that we’ve raised our natural gas guidance a couple of times, that number is going to be a little bit higher this year and than we originally anticipated the next year, they’re finishing up the program there. So our natural gas production might be flat to even a little bit down.

So I think we still think we will have on a total production basis, we’ll still have single digit production growth probably a little higher on the oil side and a little flattish on the gas side. It’s kind of what we’re looking at. But again we’re some of that always depends Mike on the just the mix of wells that you ultimately chose to drill.

And so, I think that as we firm up our plans towards the end of the year, we could decide on the little different mix or little different program than what I’m currently modeling. So I’ll be able to be a lot more clear and specific on that when we get to Analyst Day.

And so I hope don't treat me if that number is a little bit different when we get there but again I think that’s sort of the direction that we see..

Mike, this is Matt.

I would just jump in here and add to what David is saying, I mean if we’re looking at destocking numbers and that's clearly a reflection on what we focus on talking about operational efficiency we are able to do with three rigs, we’re drilling the wells half the time we were last year, so we were able to drill and complete a lot more wells in the course of the year..

Got it. It helps frame it up realize it's still early there. I appreciate that.

The third quarter production mix little gassier was that due some Haynesville coming online or something else going on there?.

No I think it was primarily due to some Haynesville wells but like I said, we had a couple more wells that came on early in the third quarter that we had actually anticipated were not going to come on until later in the year and that just gave us a little bit more gas production than what we were forecasting for the quarter but nothing more to read into it than that..

Mike, one other mixing on the Haynesville if you remember we have an 85% to 90% net revenue that we market our own gas, those wells when first drilled they don't have severance taxes for the couple of years. So those are actually we’re earning a very good rate of return on those wells.

And again I mean they’ve held up very well and Chesapeake costs on those wells have continued to come down but the well seems are doing just as well. So I think they’ve done a good job. We’re pleased to have to higher net revenues so they were enjoying that extra 15% or so. So everything that we’re drilling, we believe we’re making money on.

And the more we drill a lot of these wells the better we’re doing on our rate of return and we estimate wherever $100,000 savings you’re increasing your rate of return somewhere between 1% and 2% depending on top of what formation you’re drilling to and just exactly where you are and little bit on the recoveries all of which is a dynamic process but that starts to make a lot of difference particularly given the number of wells on our inventory that we still have to drill for years to come.

So I think this path is just making a lot of progress the land people are doing a good job, clearing some of these locations so that gives us more choice and deciding where to put these rigs but we're not just doing it for here and now, we’re trying to make some longer time like the Scott Walker and the Twin Lakes well as well as what Matt says is confirming the advantages of drilling that well from the same location just different license as well as delineating the spacing pattern.

So it’s a great job.

As you know our people like around the table and discuss things and the team work is I’d like to commend the whole staff for what I consider excellent team work that just gets better and that all those guys, the team leaders are really making an effort to learn all parts of the business from the infrastructure to land to geology to engineering and I just really appreciate all their extra, I would say all Executive Committee, we appreciate all their extra efforts..

Great. If I could sneak one more in, just wanted to get an idea on may be how you characterize the acquisition market in the Permian now both from organic leasing standpoint and A&D in general there versus may be a year ago, given that low price has been low here for a while now..

I really hadn't seen much change. I think it's a statement about the quality of the assets out there and the opportunity is the fact that undeveloped leases have continued to hold their value so well. You hear instances of sales but they're still hard to make.

We're -- we have enough on our play that we're not really very active and going after producing properties because of the large amount of undeveloped acreage that we have that earns a better rate of return than what you can generally achieve from an acquisition of the producing properties.

But I'd like to have Van comment because Van is actively up here nearly every day trying to find things and test the market.

Van, will you respond?.

Sure, Joe. We're seeing still a good active deal flow and have through the year, prices have remained steady, deals have always been difficult to come by, we've been fortunate with Delaware to get what we have and we're still seeing new opportunity. So we continue to evaluate new opportunities. The team is doing a great job in their evaluations.

There is a lot of folks in the market right now that are just waiting to see what oil prices are going to do, it's been pretty steady..

Hey, this is David, Mike. I'll just add one last comment and that is I think all come into our line group and say I think we've been excited too about the opportunities that we've had to be able to pick up acreage within the cores areas that we already have.

So as we propose and drilled wells, there had been opportunities for us to pick up additional interest in some of those wells. There is often some unleashed interest in the units and our guys have been very diligent in terms of picking that up and we're seeing opportunities to add nice pieces of acreage in and around our core areas too.

So very pleased about that and still actively looking to do that. And I think just overall we've grown our net acreage in the Permian by 40% this year. So we started the year at about 66,000 acres and we're up to about 91,000 acres now and of course that’s more than 10-fold when we went public.

So again we this is always going to be a third leg of the stool for us and I think that our land groups and our teams have just done a tremendous job of establishing this position for us in the basin. I think we had about 7,500 acres out there when we became a public company.

So I think it’s been a great achievement and we try to highlight that a little bit in the presentation that we soon around there is one of the slides I think it’s on Page 5 that in lower right hand corner, we had put our growth in the acreage in the Permian over the past several years.

So overall, I think we're still seeing a lot of opportunity out there..

David that’s a great point. I just wanted to add one thing that is if you look at the growth of our acreage over the past few years in the Delaware Basin, it’s been a very steady growth and it’s not been just buying blanket acreage across the basin, it’s been very selective.

And so we continue to be selective in just try to buy the best properties that we can. So just want to add that piece, it does show that over the last few years..

Mike, we would welcome always as always more deal flow but I think people are these assets are good and it’s always hard to get good assets away from people.

So I’m glad we got the position we did, I’m glad we started this early as we did and I’m very sorry that our technical staffs keeps coming up with more zones to test and keeps finding better ways to do it. So really have this has been a challenging year but it has been gratifying and that it's going to turn out to be one of our best too.

We’ve done the HEYCO transaction, we’ve done handling, we issued our first bonds, we had an equity offering, we’ve resolved a number of things nagging, we've added capability in the Midstream. So I think our staffs really do a lot of credit and I appreciate you asking that question so I could drag down on them a little bit..

Our next question comes from line of Jeff Grampp with Northland. Your line is now open..

I wanted to talk a little bit more about the Wolfcamp and Rustler Breaks with you guys are drilling this test kind of more on the central part of the project just kind of wondering may be geologically how you guys are seeing, you got a couple of data points to the South and now data points to the North.

Just kind of geologically how you see this formation changing across your projects and I guess just kind of setting expectations should we think of this upcoming well more as kind of a science project similar to this most recent well or do you guys think it’s little bit more de-risk more of a development well given it’s little bit further south?.

Jeff we try not to drill any wells this science projects, we want everywhere we drilled to make money and that’s what we go in to do and I think we will make money from the Scott Walker and I believe we will make, I think you're referring to Dr.

Kay well, is that right?.

Yes I don’t think we identified the name of the well in the release but that is the well he's referring to, yes sir..

Right and we expect this to be a good well and just be a further delineation of the Wolfcamp in there.

Ned, do you want to add anything to that?.

Yes I mean I think as we’ve alluded to earlier in the call, the Scott Walker was an important test to understand how the Wolfcamp changes across our acreage and it is the Wolfcamp B source rock is potentially a little bit thinner out there to the north and the X and Y sands are little bit thinner in Scott Walker but once you down to the Dr.

Kay you’re starting to see a lot more of the properties that we saw in both the Tiger and Guitar in terms of source rock that gets reservoir quality.

So we're quite optimistic about the center part of the acreage and we feel again this has been Scott Walker was important for understanding that beginning to delineate and really kind of rank the acreage but Scott Walker really doesn't change our view of being very optimistic about the Wolfcamp and Rustler Breaks, if commodity price cooperated a little bit more, I mean in Scott Walker we would probably looking at it in a quietly different way, right now where we’re at - we would probably want to add more results like Tiger and Guitar obviously but..

Yes. For the Wolfcamp, let’s say Scott Walkers First and Second Bone Springs are so strong, you could easily have a development program there and that’s probably what you weight in, is good, better, best between the Wolfcamp and the Bone Springs to the Scott Walker. And then as you get down to the Dr.

Kay is it going to be Wolfcamp more like the Tiger and the Guitar which you performed so well or is it going to be Bone Spring has performed so well elsewhere in the area. So it’s a nice setting to drill that and we think either way we’re going to have a good result.

And then I’ll set up some further development drilling in the Rustler Breaks area, Jeff..

Okay, appreciate the color and it’s still helpful. And then just kind of wondering on newer frac design generations obviously you guys have a great track record in the Eagle Ford and starting to get your legs under you with different fracs there in the Delaware.

Just kind of wondering, what you guys are seeing on some of these recent tests and may be all thing peak at Analyst Day if we should be expecting some further design changes or just kind of what you guys are thinking on, on that front moving forward in the Delaware?.

Well, Jeff probably how we work, we do postmortem on every wells that we drill to state what may be we could have done better.

The frac is on are being examined evolving some, but you have a more complex frac questions to address because you have basically three different types of loss you got the shale, you got the micro coupled, and then you have the more conventional sands are in the Bone Springs, may be type gas sands.

So you got, you can’t frac them all the same way and but the basic concept is still valid is generally more proppant, more fluid is better.

Now exactly how you do that in how many stages is one that will continue to evolve but the technology is working, you don't know what’s Schlumberger and Halliburton have up their sleeve that will further enhance it and what advances from the other operators are doing and that’s one reason why while we like to participate in a certain number of non-operated wells because no one can -- has all the answers, so we like seeing what the others are doing was learning as well as advancing in our own teams would seem to worked pretty well out there.

We came there, transferring our frac technology and results from the Eagle Ford out there to the Permian and we were among the first to do the really big fracs out there and others have followed but everybody is getting better which is kind of makes you want to get better too, Matt?.

Jeff, this is Matt, and Joe’s really hit on all the important points there but I do want to underscore couple of things number one is where we started out here in the Permian Basin, we had great learnings in Haynesville and great learnings in Eagle Ford and we came to the pumping into the Delaware specifically and started looking at everyone of us just talking about workshop, Wolfcamp specifically, we jumped out and pumped twice as big most of our competitors are pumping in the area.

And I think since then some of them solved too. But the other two rock types we’ve got different ideas about those, different ways to complete them and then as you saw in the release most recently we pumped at Janie 3,000 pounds per foot of propping in the ground and typically bigger is better.

But as always we're going to continue to evolve deep frac designs and what we're really looking to do is to make the most money. So at some point in time, you could pump diminishing returns on the process volume and the fluid volumes we also we're trying to find that sweet spot and there we will be make a bunch of money.

And additionally, now it's a good time for us to do that, because now definitely pricing is down. So we're able to pump these bigger jobs and still for less money than we were pumping just a few months ago..

Thanks. And just last thing, I'd like to thank our vendors who have worked with us not just to help us reduce cost or make these wells more economical but help find better ways to drill these wells. Patterson has been good. Schlumberger has been good.

And on Schlumberger we've looked at refracking some of the wells, open up some areas that may be weren't fully open. And that shown some promise in some of these in increasing recoveries.

So we appreciate all those opportunities and really feel good there's much is going on out here, a year from now, we'll back to talk about some early innovations in 2016 that have really elevated recoveries and saved money.

So I think it's a great question and can assure you that we're looking in our postmortem back to ever frac how to do it better and faster..

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..

Thank you, Shinise. As this -- I'd like to thank you all again for your interest, these very thoughtful questions, and your active participation on today's call.

This quarter and upcoming year will continue to have its fair share of challenges but it will also present opportunities that Matador will endeavor to try to uncover and convert these opportunities into long-term value for our shareholders and bondholders. We look forward to visiting with you all again soon and with that we'll sign off.

But once you note that we're available to you, if you wish to call in and visit and we invite you to come by and see us too. But thanks again to all of you and we hope to see you soon..

Ladies and gentlemen, thank you for your participation today. This concludes the program. Everyone have a great day..