Matador Resources Co., Dallas, reached record production in this year’s third quarter and confirmed a decision to expand its Delaware basin gas processing capacity.
Production averaged 135,096 boe/d in the quarter, 3% more sequentially than its previous total record of 130,683 boe/d in second-quarter 2023, and a 28% year-over-year increase from 105,214 boe/d in third-quarter 2022.
The company had record oil production of 77,529 b/d, which was 2% more sequentially than the previous record of 76,345 b/d in this year’s second quarter.
Natural gas production in third-quarter 2023 was 345.4 MMcfd, 6% more sequentially than the previous record of 326 MMcfd in this year’s second quarter.
Primary drivers were better-than-expected production from wells in Lea County, NM, higher-than-expected production from non-operated assets, fewer shut-in wells than anticipated, and certain land transactions that closed in third-quarter 2023 instead of fourth-quarter 2023. Additionally, a force majeure event experienced by a third-party midstream provider in the quarter has been resolved.
Joseph Foran, chairman and chief executive officer, said a portion of natural gas from wells in northern Lea County, NM, is being delivered to and processed by subsidiary Pronto Midstream LLC at its cryogenic natural gas processing plant (Marlan plant). The plant is processing natural gas volumes up to its designed inlet capacity of 60 MMcfd.
Looking ahead, Matador expects to connect Pronto’s natural gas system with one owned by midstream JV San Mateo Midstream LLC in first-quarter 2024. Also in first-quarter 2024, Matador expects to connect Pronto’s natural gas system to Matador’s Advance acreage for direct delivery of natural gas volumes to the Marlan plant.
In addition, Matador is advancing plans to expand processing capacity through an additional cryogenic natural gas processing plant with a designed inlet capacity of 200 MMcfd and is evaluating whether to include a building partner. For fourth-quarter 2023, the company increased its capital expenditure budget to $346 million from $320 million.
Full-year 2023 midstream capital expenditures have been lowered to $135-165 million from the prior expectation of $150-200 million.
The company is currently operating seven drilling rigs in the Delaware basin and anticipates adding an eighth rig in first-quarter 2024.
For fourth-quarter 2023, Matador expects to produce an average of 145,000 boe/d, a 2% increase from previous guidance. Oil production for the fourth quarter is expected to average 86,750 b/d at the midpoint, a 1% increase from its previous expectation. The company anticipates having 47 net wells in some stage of drilling or completion on Dec. 31, 2023.