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Matador Reports Trio 3rd Bone Spring Well Results; Averaging 2400 Bop/d

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   |    Friday,February 03,2017

Matador announced initial test results from the three Mallon 27 Federal Com wells recently drilled and completed in its Ranger asset area in Lea County, New Mexico.

• Each of the three Mallon wells are 7,300-ft horizontal laterals, and each has a completed lateral length of approximately 7,000 ft. Each well was completed with a 29-stage fracture treatment, including approximately 40 barrels of fluid and 3,000 pounds of primarily 20/40 mesh white sand per lateral foot. These were the largest fracture treatments pumped to date by Matador in a Bone Spring completion.

Mallon Well Results - Ranger Asset Area

The 24-hour initial potential test results from three recent completions in its Ranger asset area in Lea County, New Mexico. These three wells, the Mallon 27 Federal Com #1H, #2H and #3H, are the first three Matador-operated wells drilled on the acreage acquired from Harvey E. Yates Company in February 2015. All three wells are located in Sections 27 and 22, Township 19S, Range 34E in Lea County, New Mexico, and all were completed in the Third Bone Spring sand.

In aggregate, the three wells flowed 7,856 barrels of oil equivalent per day, consisting of 7,172 barrels of oil per day and 4.1 million cubic feet of natural gas per day (91% oil). Matador has just over a 70% working interest in each of the Mallon wells. Owing to a large portion of federal acreage comprising each unit, the Company's royalty burden in each unit is approximately 18.5% (as opposed to up to 25% on typical fee leasehold), giving Matador an overall net revenue interest of approximately 58% in each of these wells. As Matador noted at the time of the HEYCO merger, the Company expects to benefit from lesser royalty burdens on wells drilled on the former HEYCO acreage.

The location of the Mallon wells is shown on the accompanying map. At February 2, 2017, Matador is operating four rigs on its Delaware Basin acreage, including one rig in the Ranger/Arrowhead asset area. Matador expects to keep one rig running in its Ranger/Arrowhead asset area throughout 2017.

Management Comments

Joseph Wm. Foran, Matador's Chairman and CEO, commented, "We are pleased to announce the results of the Mallon wells, which are among the very best wells Matador has drilled in the Delaware Basin. These wells, in addition to other non-operated wells in which we have participated since the HEYCO merger, highlight the prospectivity of our northern acreage. We are excited to further delineate and develop this portion of our Delaware Basin acreage. We continue to be pleased with our drilling results throughout the Delaware Basin, and we look forward to discussing the results of the Mallon wells and other operational highlights in our fourth quarter and year-end earnings call later this month."