Oliver Huang: And for my follow-up, I know that you all have had extensive results and data kind of across the stack, but the increase of capital for wells targeting the First Bone Spring Carbonate for the 2024 program, so any color with respect to just kind of the thought process behind that decision? And maybe if there’s any sort of commentary on expectations for those wells and also assumptions embedded for year-over-year well productivity trends for the program as a whole.
Tom Elsener: Sure. Oliver, this is Tom Elsener. Yes, we really like the First Bone Spring and the reason we’re investing money in that specific interval is simply because the well results have been have been very solid even going back to many years ago with our kind of first tested the first ones bring at Marlin Downey in Eastern Antelope Ridge, we continue to delineate that zone kind of all — kind of throughout the Northern Delaware Basin and feel very confident in those targets. Kind of going to your kind of well productivity question, yes, we put out Slide number 6 or Slide C showing our average EOR over the last 4 years been a very, very successful program, and we could expect that to continue. There’s a variety of different performances in all different asset areas, but we continue to focus on investing the company’s resources into the northern kind of the oilier portion, and you see that in the oil awards that we’ve generated in the First Bone Spring was certainly part of that.
Operator: Our next question will be coming from John Freeman of Raymond James. Your line is open.
John Freeman: On the Marlin processing plant, you laid out the return and the payback period that’s expected. Can you also speak to how you all envision the volume split on that plant between Matador and third parties once it’s up and running next year?
Brian Willey: Yes, John, this is Brian. I’m happy to take a shot at that, and then Glenn can clean up anything after. But really, I think right now at San Mateo, we’re 70%, 80% Matador. I think as you move over to Pronto, it’s almost the opposite right now. But I think going forward, you’ll end up more with the new plant, almost 50-50 split with the new plant. So all in, we’ll probably end up being 60% Matador, 65% Matador and the other third party. And we look forward to those third-party opportunities. We think there are a lot of them up in that area. And so a lot of good partnerships and a lot of repeat customers. And so as we build the plan, we think there’s a lot of real opportunity there.
John Freeman: And then my follow-up, and it kind of dovetails you just mentioned, Brian, which is you all talked about kind of the need in this area for more processing for — it seems like for probably about a year. And so I guess once we think about the Marlin plant coming — the expansion lease being completed next year, is there another area across all acreage footprint that you’ve already sort of identified is like another area that, at some point, you all would like to expand processing capability?
Joe Foran: That’s still in the thinking stage and give us a little time to firm up our ideas and plans, and we’ll be happy to share them with you. And — but it’s a little too tenant to go out there and then be — why did we do exactly what that is. We’ve — we’re in the planning stage, and there’s a lot of factors. And when we come out, we’ll have all that detail for you, but it certainly is a matter that’s on our mind we think a good opportunity to go along with our other opportunities. But we’ve got to prioritize because we have some great drilling opportunities and great third party and reconciling those is part of the process, the guys around this table or we’re all thinking about with each other.
Operator: Our next question will be coming from Philips Johnston of Capital One Securities.
Philips Johnston: Most of my questions have been answered, but maybe just a clarification on the additional advanced property acquisition in Q4. You mentioned about 1,000 a day BoE back to Q4. Just in terms of timing of when that closed, was that a full quarter’s impact or a partial quarter’s impact, meaning that the current run rate impact is somewhere north of that number.
Brian Willey: Yes, this is Brian. I’m happy to answer that. It really — we’re referring to the 1,000, we’re really referring to the full quarter impact. On a go-forward basis, I think that deal will continue to have really good returns for us going forward into 2024. I mean I think, again, as I said, the land guys have done just a fantastic job. I think if you look at Page 12 of our deck, you’ll see in 2012, we had 7,580 acres, and now we’re over 152,000 net acres. And so they continue to build that brick-by-brick acquisition and add to our production, add to our reserves and do a fantastic job.
Philips Johnston: And just to clarify what’s embedded in your production guidance, does the fourth quarter ’24 exit rate guidance assume any incremental volumes from these types of future small-scale acquisitions like the ones you’ve been doing? Or is it sort of organic from where we see today?
Brian Willey: Yes. I think going forward this year, really, it’s more acquisitions that we know that are close to being closed or being closed, we take those into account. But other than that, it’s in large major, it’s organic growth. And so I think that we do these brick-by-brick acquisitions. There’s always some of that. And we know there will be some of that. So we take some of that into account. But really, it’s more on just a straight organic growth for the year as we look at the exit rates 2024.
Operator: And the final question will be from Kevin MacCurdy of Pickering Energy Partners. Kevin, your line is open.
Kevin MacCurdy: I appreciate all the details on the first quarter turn lines and CapEx. You guided exit rate for 4Q oil was better than we expected. Can you kind of help us bridge that gap on how you hit that exit rate, any more color you can provide on the CapEx or the turn-in-line cadence throughout the year? I mean, you mentioned the 21 wells that come on in the second quarter. Is there another slug of wells? Or is that really what’s going to drive the production higher?
Brian Willey: Yes. This is Brian. Kevin, thanks for the question. I think going through the year, we talked about those 21 wells will come on in the second quarter, and those really do help drive production higher. In addition, this year, in total, we expect to turn to sales 94 net wells. And so those are spread out as well kind of throughout the second, third quarter as we go forward into the fourth quarter. And so it’s really a mix there. It’s kind of split between the two quarters from third quarter and second quarter with but more weighted towards the second quarter just because those 21 wells will come online. And so that sets us up for that great fourth quarter that we’ve talked about. I think we’re really excited about that exit rate and how it sets us up for next year.
Kevin MacCurdy: And as my follow-up, you mentioned that you made some payments on the Marlin plant expansion in 4Q, how much of the 2024 midstream budget is allocated to the processing plant expansion? I think in the past, you’ve said that, that plant could cost $200 million overall.
Glenn Stetson: This is — Kevin, this is Glenn. So for 2024, approximately $90 million to $100 million is associated with the actual Marlin 2 plant. And then there’s obviously CapEx that we’ve attributed to the build-out between the connectors that we’re talking about there and the addition of compressor stations and then building out to some of the — our properties on the Ranger North — the Northern part of Ranger.
Operator: Thank you, ladies and gentlemen. This ends the Q&A portion of this morning’s conference call. I’d now like to turn the call back to management for any closing remarks.
Joe Foran: Yes. I do have a few closing remarks. The first is just to refer you to Slide 3, which summarizes our company highlights for last year. At this time last year, I was saying that we were beginning the year at about 100,000 barrels BoE per day and that I thought with the advance and our other drilling programs, we would boost that during the year and come up by 50%. And sure enough, we did. Our exit rate was 145,000 barrels. So great work by the team. Second — and Slide 8 just shows that and also emphasize that our alignment of interest that the management group itself has about 6% of Matador, and we have over 90% participation in our employee stock purchase program. So everybody in this room and throughout the company, it’s just like you, that we’ve got chips on the table.
I’d also like to give a shout out to our measurement room. It runs 24/7 like our Maxcom and keeps an eye to be sure we’re getting paid for each barrel of oil and MCF. And over the years, time period, they’ve added tens of millions of dollars. I think $32 million was the number we discussed at our Board meeting. So it’s great work by the in tracking that and checking each barrel of oil at each invoice. Some of that’s tedious work, but they’ve stuck to it and it’s paid off. I’d also — just you all have asked a lot of really good questions, but I just want to be some things that emphasize the reserve growth from $360 million to $460 million. And if price of oil hadn’t slipped, there’d be more oil than that. Some of those, as you would probably be approaching $500 million.
And then the growth of the acreage itself, I think the land group, Van and his guys and the women — the men, women, as land group that they increased the Delaware Basin position from 119,000 acres to 152,000 acres and if you remember, when we went public in 2012, and we’re establishing this as an area of interest, we began with 7,500. So we’ve gone from 7,500 to 150 — over 150,000. I didn’t want that to go without being missed and that you have growing third-party revenues from customers out there in the basin. And these are really the blue chip companies, and we’ve tried to be careful. Also, I’ve always believe I’ve been in this business 40 years. So I started with $270,000 today, and I think you put our assets altogether approaching $10 billion.
And one thing is just kind of — we’re more of a tortoise and a Hare getting little bit by a little bit year after year. And Slide K on Page 14, a shows you that it’s been steady since we went public. And we see for the foreseeable with a number of locations that Tom and his team have been putting together the growth of the midstream Van’s acquisition team that this will continue and should be there. Billy’s group is saving money on the cost, but he’s also doing innovations that make us more capital efficient, such as the using these modern rigs to come in. And as Maxcom [indiscernible], am I saying that right?
Unidentified Company Representative: You are Joe, yes.
Joe Foran: They gave me a hard time on my — some of my pronunciation, but that’s been a big add. And you can see the outperformance that we’ve had over the years on Slide O compared to S&P 500 oil price ex LP. And I think that’s a lot of what we have to offer a consistent performance with a strong balance sheet with our leverage ratio less than 1, and we intend to continue to keep an eye on the balance sheet because we’re shareholders, too, and look for ways to boost the dividend. So I do want you also to know that, look, we are available to you. If you’ve got questions, you need answers. Mac is really good. Welcome to your questions. Brian will take them. If you come visit us, we’ll have — we’ll buy you lunch or breakfast and we’ll have a more extensive.
So we want to be open because we’re proud of what we’re getting done and it’s kind of the old-fashioned pick and shovel bases and little by little. And we think our people on staff are working trying to get better every day. It’s corny to say that, get better every day and help the team get better. But that’s what we aim for. And I think you can see it’s from where we were a year ago to where we are today and the outlook going forward, we’re still making very steady progress up and to the right. So with that, I’m going to sign off, but now our phone lines are open. If you need further follow-up and information, and thank you for taking the time that you have talked to us as well as study.
Operator: Ladies and gentlemen, thank you for your participation today. This concludes today’s program.
