Hi, this is Sandy Segrist. I am the senior editor for gas and midstream with Hart Energy. Here I'm thankfully sitting with Joe Foran, the CEO of Matador Resources, who has been thankfully joining us today here at SUPER DUG Conference & Expo in Fort Worth, [Texas]. And sir, if we could please get to start of the interview. Talking about Matador, you were one of the first E&Ps to prepare for the trade war by locking in hedges. What drove that decision at the time?

Joe Foran, CEO, Matador Resources: [With] our experience and my experience of over 40 years, you can kind of sense events are changing much like the weather. You can see the storm clouds coming sometimes in anticipation of rain and it’s just reading the tea leaves as an organization with the other senior leadership at Matador. It just felt like that it was time to hedge our bets and that the prices that we were getting by the hedges would make sure that whatever happened, we were going to be in good shape with plenty of dry powder through an important period where you would hope that it would generate some opportunities.

SS: Okay. Yes sir. That makes sense. It seems you're still confident Matador is planning to increase crude production by 17% by the end of 2025. What is involved in that plan?

JF: Well, that's our best estimate. For 40 years we've had 20% or better growth, just trying to hedge that a little bit by 17%. We might do better if we're doing our averages, but we'll do some combination. We have an active exploration program that we like the results [of] so far this year. We have an active acquisition program, we call it Brick by Brick, but it's picking up a property or a group of wells. And then we also have a midstream business, which sometimes has enabled us to get a prospect because you have a tight basin on having capacity to get oil and gas out of the basin. So by doing a deal, sometimes if by somebody else, we can give them flow assurance that if they drill a well or we drill a well together, we will be able to get the oil and gas out of the basin. So those combinations as well as drilling wells on acreage we already have, has been worthy.

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SS: One of your special points of emphasis today has been coming out stronger during challenging times. What are your strategies and what's been Matador's strategies for following up on that?

JF: Well, again, over 40 years, we've been tested a lot of different ways about how do you keep growing at double digit rates during times where commodity prices are low or commodity prices are high, both present problems. It's a different set of problems and a different set of opportunities. But you really go about it in the same way is that you have your point people out there making offers, you have your point people seeing what might be available and you follow up on your relationships in the past and you start getting phone calls from people that are needing a deal or don't have the dry powder to take a 100% of a deal, ‘Would you be interested in 50%?’ Those things turn up, you just have to have a measure of patience as well as being proactive in getting out and seeing if somebody would entertain an offer and then make it reasonable so that you might come to terms.

SS: Yes, sir. It makes a lot of sense. Matador was very active in the first quarter. I understand there were 31 transactions made. What was your strategy during that time? Was there anything you were looking for?

JF: What we try to emphasize is to get out of your office and try to go see people in other offices to see what might be a mutual benefit. And you have greater rationalization because of [the] last two or three years rash of M&A work. Then you have a rationalization from people realizing they don't have the budget to drill a 100% of all the prospects. So there's deals out there, but they're not going to hang a sign that says, ‘Come see us! We have deals!’ because they just don't want to seem that they're in straits or anything. And often they aren't in straits, but they realize this is the time to get out and find some matters of mutual benefit. You also see an increase in people willing to trade properties. They'll trade their working interest and your well for their working interest in our well, and that's a healthy process every so often. Go through it and rationalize what you have and work with your friendly competitors.

SS: Yes sir. Considering the current status of the market, what are your plans in the second quarter and maybe for the rest of the year. Are you all looking at any reduction in capex, rigs and buybacks?

JF: First on the buybacks, we have announced that we had a share repurchase program authorized by the board. I can't talk about all the terms, but we're active and at the end of the first quarter, people will see that we've been active. Second is the capex, we're expecting some capex decrease from the vendors realizing with commodity prices coming down, they have to make adjustments too. So it's not a one-sided deal and we see that. Then finally, if you make certain acquisitions, you may be able to drop a rig and the rigs are getting better, so they're drilling them faster. You may not feel very much by dropping a rig that it's going to affect your overall production. And then just as historical matter, as I mentioned, we've had 40 years of double-digit growth. We are, one way or the other, off to a good start this year, but we think more is to come.

SS: Well, speaking of that, for the rest of the year, what kind of opportunities are you all focusing on? Where do you plan to grow into, things like that?

JF: Well, I think the area we're most active in right now is the Delaware [Basin], and that's both oil and gas production. If gas prices were to stabilize, we have Haynesville production. But behind Haynesville in our deal, we did a number of years ago with Chesapeake, we saved all of our uphold rights. So we have about 200 Bcf to 300 Bcf of gas reserves over there that if gas prices stabilized, we could easily take that up. We drilled test wells, so that's kind of ready to go. It's held by production, but it's a nice option to have.

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SS: Well those are all the questions that I have for you right now, sir. Thank you very much for taking the time to talk to us today. This is Sandy Segrist with Hart Energy with Joe Foran of Matador Resources. Thank you.

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