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Matador IPs Five-Well Wolfcamp Pad; Top Well Hits 2,860 BOEPD IP24

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   |    Thursday,June 18,2020

Matador Resources Co. announced the results from the first five wells completed and turned to sales on the Ray State tract in the Rustler Breaks asset area.

The company also provided updates on the Rodney Robinson wells in the Antelope Ridge asset area and upcoming milestones for the remainder of 2020.

Key Highlights:

  • The five Ray State wells in the eastern portion of the Rustler Breaks asset area, all two-mile laterals, were completed and turned to sales in May and early June as planned with IP24 aggregate test results of approximately 12,500 BOEPD, including 7,600 BOPD of oil per day and 29.5 Mmcf/d of gas

Ray State Well Results

Matador is pleased today to announce the results from the first five wells completed and turned to sales on the Ray State tract in the eastern portion of its Rustler Breaks asset area in Eddy County, New Mexico, all of which are two-mile laterals.

The following table highlights the 24-hour IP test results from each of these five “Ray State” wells.



Well Cost Details

Matador is very pleased with these IP test results from these five Ray State wells, which totaled 12,507 BOE per day, including 7,599 barrels of oil per day and 29.5 million cubic feet of natural gas per day. In addition, Matador is pleased to report that the costs to drill and complete the Ray State wells averaged just over $800 per completed lateral foot, almost 10% less than originally anticipated. As with the recent Rodney Robinson wells, these costs are among the lowest drilling and completion costs per lateral foot that Matador has achieved to date in the Delaware Basin.

Matador has an approximate 50% working interest in each of the Ray State wells. The Company is currently producing these wells into its operated facilities at restricted flow rates. Oil, natural gas and salt water production from these wells is being gathered and transported by pipeline by San Mateo, our 51% owned midstream joint venture.

With the completion of the Ray State wells, Matador has completed and turned to sales 11 gross operated wells amounting to approximately 16.2 miles of horizontal production in the Delaware Basin in the second quarter of 2020 as anticipated. Of these 11 gross operated wells, the five Ray State wells were turned to sales in the Rustler Breaks asset area, five wells were turned to sales in the Wolf asset area, and one well was turned to sales in the Antelope Ridge asset area. The next wells Matador expects to complete and turn to sales are the five Leatherneck wells in August 2020 in the Stebbins area of the Delaware Basin.

Rodney Robinson Wells Update

Following these IP tests, these six Rodney Robinson wells were turned into Matador’s operated facilities. The two Second Bone Spring and two Wolfcamp A-XY wells have been produced at restricted flow rates for the last two months. Based on observations of early performance from other Avalon wells in the area, however, the two Avalon wells were purposely produced at higher flow rates to determine if these wells would continue to clean up and improve with time, and, in fact, both wells did improve with time. The Rodney Robinson Federal #101H, a Lower Avalon completion, improved to 2,087 BOE per day (a 37% improvement), as compared to the originally reported IP rate of 1,525 BOE per day, and the Rodney Robinson Federal #102H, an Upper Avalon completion, improved to 3,521 BOE per day (a 30% improvement), as compared to the originally reported IP rate of 2,706 BOE per day.

In aggregate, Matador expects these six wells to produce in excess of one million BOE in the second quarter of 2020, their first full quarter of production, including approximately 750,000 Bbl of oil and 1.5 billion cubic feet of natural gas. Matador has a 100% working interest and an 87.5% net revenue interest in each of these six wells. This “higher than normal” net revenue interest should substantially increase the economic returns from these wells. Matador plans to drill four additional Rodney Robinson wells starting in the fall of 2020, and these four wells are expected to be completed and turned to sales early in the second quarter of 2021.

Upcoming 2020 Milestones and Operational Update

Completing and turning to sales the five Ray State wells in the Rustler Breaks asset area marks the second of four key production catalysts (following the Rodney Robinson wells) Matador had outlined in prior updates as important milestones for its 2020 operational plan. At June 18, 2020, Matador is operating four drilling rigs in the Delaware Basin but will reduce its operated drilling program to three rigs by the end of this month as previously indicated. Matador currently plans to continue operating three rigs in the Delaware Basin for the remainder of this year. The next milestone for 2020 should be reached in August when Matador expects to turn to sales five two-mile laterals – the Leatherneck wells – in the southern portion of the Arrowhead asset area, also known as the Greater Stebbins Area.

In the third quarter of 2020, San Mateo Midstream II, LLC (together with San Mateo Midstream, LLC, “San Mateo”) is expected to complete and place in service its main midstream project for the year, a gas processing expansion of its present Black River plant. At that point in time, San Mateo, the Company’s 51% owned midstream joint venture expects to finish its 200 million cubic feet per day expansion of the Black River cryogenic natural gas processing plant (the “Black River Processing Plant”) and to extend San Mateo’s total processing capacity to 460 million cubic feet of natural gas per day. Once finished, Matador’s associated oil and natural gas trunk lines will stretch for 43 miles across the Delaware Basin from the Stateline asset area to the Greater Stebbins Area in Eddy County, New Mexico. This expansion project continues to be on time and on budget. Meanwhile, San Mateo’s salt water disposal capacity has increased to 335,000 barrels of water, 98% of which is on pipe.

Soon after the Black River Processing Plant expansion is completed, beginning in September 2020, the fourth and most significant production milestone should be reached, when Matador anticipates it will begin production from the first 13 wells being drilled in the eastern portion of the Stateline asset area (the “Boros” wells). Matador has a 100% working interest and an 87.5% net revenue interest in each of these wells, which are all two-mile laterals. All 13 Boros wells have been drilled, and completion activities are currently underway on these wells. Drilling times and drilling costs for the first 13 Boros wells were, in aggregate, better than the Company’s expectations.

Two of Matador’s operated drilling rigs have recently initiated drilling operations on a 12-well batch anticipated to be drilled and completed in the western portion of the Stateline asset area (the “Voni” wells). Each of these 12 wells is planned to have a completed lateral length of approximately 2.3 miles, which should become the longest horizontal laterals that Matador has drilled and completed in the Delaware Basin. The initial Voni wells are expected to be completed in three distinct intervals, including four Second Bone Spring completions, four Wolfcamp A-XY completions and four Wolfcamp A-Lower completions. The Voni wells are expected to be turned to sales in the second quarter of 2021.


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