Matador Resources Co. has released the results from the first four Boros wells completed and turned to sales in the company’s Stateline asset area in southeastern Eddy County, New Mexico, all of which are two-mile laterals in the Permian Basin.
Matador acquired the 2,800 gross and net acres comprising its Stateline asset area in the September 2018 Bureau of Land Management lease sale, and these are the first four of 13 Boros wells the company has drilled and completed on the eastern portion of this leasehold. Matador remains on track to turn all of the remaining Boros wells to sales over the next two weeks as originally planned and previously announced.
The IP test results from the Boros #215H, #216H and #217H wells are three of the top four IP test results that Matador has achieved to date for wells completed and turned to sales in the Wolfcamp A-Lower formation throughout the Delaware Basin. The Boros #215H test result is the best IP test result that Matador has achieved for the Wolfcamp A-Lower formation and is among the very highest IP test results that Matador has achieved for any formation in the Delaware Basin.
The Boros #201H test result is also among the top five IP test results that Matador has achieved for wells completed and turned to sales in the Wolfcamp A-XY formation. Matador has a 100% working interest and an 87.5% net revenue interest in these Stateline asset area wells.
In addition, these 24-hour IP test results were recorded at very high flowing casing pressures of about 3,100 pounds per square inch (psi) for the Boros #201H well and between 3,500 and 3,800 psi for each of the Wolfcamp A-Lower completions, further indicating the strong productivity of these wells.
“We are very excited and gratified by the strong results from our first four Boros wells in the Stateline asset area, including our record Wolfcamp A-Lower IP test results on the Boros #215H, #216H and #217H wells,” Matador’s Chairman and CEO Joseph Wm. Foran said. “We look forward to putting the remaining Boros wells drilled and completed throughout 2020 on production and reporting those results to the markets in the upcoming weeks.”
Matador expects to have all of the remaining Boros wells online over the next two weeks, and several additional wells have already been placed on production and are currently cleaning up and beginning to produce oil and natural gas. Matador currently estimates that it has at least 75 additional wells to drill in the Stateline asset area, including the 13 Voni wells currently being drilled on the western portion of this leasehold.
All four Boros wells highlighted are currently producing at restricted flow rates through the company’s newly constructed production facilities in the Stateline asset area, and all oil, natural gas and water from these wells is being gathered via pipeline.
With the addition of these wells to the gathering systems owned by San Mateo, Matador’s 51% owned midstream affiliate, Matador currently has approximately 75% of its gross operated oil production and approximately 98% of its gross operated water production gathered via pipeline in the Delaware Basin. The company’s gross operated oil production gathered via pipeline in the Delaware Basin has increased to approximately 75% today from 55% in 2019 and 16% in 2018. Similarly, Matador’s gross operated water production gathered via pipeline in the Delaware Basin has increased to approximately 98% today from 78% in 2019 and 71% in 2018.
Matador also reported that the costs to drill and complete all 13 Boros wells in the Stateline asset area averaged just under $800 per completed lateral foot, saving more than 20% in costs as compared to Matador’s original estimates. The drilling and completion costs for the three shallowest wells, one Avalon completion and two Second Bone Spring completions, averaged approximately $725 per completed lateral foot. These costs are among the lowest drilling and completion costs per lateral foot that Matador has achieved to date in the Delaware Basin. The economic returns from all these wells should be significantly enhanced by the lower well costs.
“We are, of course, particularly pleased by the drilling and completion costs achieved on these wells at under $800 per completed lateral foot, which were well below our expectations when we began drilling these wells,” Foran said. “With the 13 Boros wells turned to sales, we are expecting a significant increase in our oil and natural gas production during the fourth quarter of 2020 and are also on track to be free cash flow positive in the fourth quarter, a major milestone.”
These results, along with numerous others that Matador has achieved in 2020, including from the Rodney Robinson and Ray State wells, continue to demonstrate the improved capital efficiency the company has achieved through its successful transition from drilling and completing one-mile laterals to drilling and completing two-mile or longer laterals in the Delaware Basin.