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.
The operator reached quarterly production average of 135,096 boe/d in the quarter, 3% more sequentially than its previous total production 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 also reached record oil production during the quarter of 77,529 b/d, which was 2% more sequentially than the previous oil production record of 76,345 b/d in this year’s second quarter.
Natural gas production during the quarter was 345.4 MMcfd, 6% more sequentially than its previous natural gas production record of 326 MMcfd in this year’s second quarter.
The primary drivers behind the performance 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, the force majeure event experienced by a third-party midstream provider during third quarter has been resolved, the company said in an Oct. 24 earnings release.
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 the natural gas system owned by the midstream joint venture San Mateo Midstream LLC, in first-quarter 2024. Also in first-quarter 2024, the company expects to connect Pronto’s natural gas system to Matador’s Advance acreage, allowing for direct delivery of natural gas volumes from the Advance acreage to the Marlan plant.
In addition, Matador is advancing plans to expand processing capacity by adding an additional cryogenic natural gas processing plant with a designed inlet capacity of 200 MMcfd of natural gas and is evaluating whether to include a partner in building the processing plant (OGJ Online, July 28, 2023).
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, which is a 2% increase from previous guidance of 143,000 boe/d. Oil production for the fourth quarter is expected to average 86,750 b/d at the midpoint, which is a 1% increase from its previous expectation of 86,000 b/d. The company anticipates having 47 net wells in some stage of drilling or completion on Dec. 31, 2023.