Matador Resources Co. said Thursday it has brought five horizontal wells in the Permian Basin’s Delaware sub-basin into production, and it plans to bring 18 more wells and a natural gas processing plant online in the third quarter.
The five wells in Eddy County, NM, within the Ray State tract of the Rustler Breaks asset area, were completed and turned to sales in late May and early June, showing 24-hour initial potential (IP) test production of 12,500 boe/d, comprising 7,600 b/d oil and 29.5 MMcf/d natural gas.
The announcement follows the start of commercial production in April of six wells at the Rodney Robinson tract in Lee County, NM, which “continue to perform better than expected,” management said. The Ray State and Rodney Robinson wells are all two-mile laterals.
The independent is concluding completion operations at its five Leatherneck wells in the Arrowhead asset area, and it has begun completion of the initial 13 Boros wells at the Stateline asset area. The Leatherneck wells in Eddy County were expected to be turned in sales in August, with the Boros wells also in Eddy County set to be ready in September.
In addition, Matador’s 51%-owned subsidiary San Mateo Midstream II LLC, expects to place in service a 200 MMcf/d expansion of the Black River natural gas processing plant in Eddy County, bringing total processing capacity to 460 MMcf/d.
The expansion project remains on time and on budget, management said, highlighting that upon completion, Matador’s associated oil and natural gas trunk lines would stretch 43 miles across the Delaware.
As of Thursday, Matador was operating four drilling rigs in the Delaware, but it plans to drop to three rigs as planned, management said. Matador said in March it was scaling back spending and activity because of the market downturn caused by Covid-19.
Two of Matador’s operated rigs have begun drilling a 12-well batch of wells in the Stateline area, known as the Voni wells, that are expected to turn to sales in 2Q2021. The wells each are to have a completed lateral length of about 2.3 miles.
CEO Joseph Foran said the company is aiming “to improve our capital efficiency and to reduce both capital and operating expenses as we work to achieve our production, operational and financial targets for 2020, which include being free cash flow positive by the end of the year.”
Matador’s total production was 71,161 boe/d at the end of March, comprising 40,626 b/d oil and 183.2 MMcf/d natural gas.
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