Matador Resources (NYSE: MTDR) Q4 2025 Earnings Call dated Feb. 25, 2026
Corporate Participants:
Mac Schmitz — Senior Vice President, Investor Relations
Joseph Wm. Foran — Founder, Chairman of the Board and Chief Executive Officer
W. Thomas Elsener — Executive Vice President of Reservoir Engineering and Senior Asset Manager
Christopher P. Calvert — Executive Vice President and Chief Operating Officer
Robert T. Macalik — Executive Vice President and Chief Financial Officer
Andrew Parker — Senior Vice President of Geosciences
Van H. Singleton II — Co-President, Land, Acquisitions and Divestitures and Planning
Bryan A. Erman — Co-President, Chief Legal Officer and Head of M&A
Glenn W. Stetson — Executive Vice President, Production
Analysts:
Noah Lee Rose — Analyst
Neal Dingmann — Analyst
Tim Rezvan — Analyst
Zach Parham — Analyst
Derrick Whitfield — Analyst
John Abbott — Analyst
Scott Hanold — Analyst
Paul Diamond — Analyst
Phillip Jungwirth — Analyst
Presentation:
Operator
Good morning, ladies and gentlemen, and welcome to the Fourth-Quarter and Full-Year 2025 Matador Resource Company Earnings Conference Call. My name is Marvin, and I’ll be serving as the operator for today. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. And a replay will be available on the company’s website for one year as discussed in the company’s earnings press release issued yesterday.
I’ll now turn the call over to Mr. Mac Smith, Senior Vice President, Investor Relations for Matador. Mr. Schmitz, you may begin.
Mac Schmitz — Senior Vice President, Investor Relations
Thank you, Marvin, and good morning, everyone, and thank you for joining us for Matador’s fourth quarter and full year 2025 earnings conference call.
Some of the presenters this morning will reference certain non-GAAP financial measures usually — regularly used by Matador Resources in measuring the company’s financial performance. Reconciliations of such non-GAAP financial measures with the comparable financial measures calculated in accordance with GAAP are contained at the end of the company’s earnings press release.
As a reminder, certain statements included in this morning’s presentation may be forward-looking and reflect the company’s current expectations or forecasts of future events based on the information that is now available. Actual results and future events could differ materially from those anticipated in such statements. Additional information concerning factors that could cause actual results to differ materially is contained in the company’s earnings release and its most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q.
In addition to our earnings press release yesterday, I would like to remind everyone that you can find a slide presentation in connection with our fourth quarter and full year 2025 earnings release under the Investor Relations tab on our corporate website.
And with that, I would now turn the call over to Joe Foran, our Founder, Chairman and CEO. Joe?
Joseph Wm. Foran — Founder, Chairman of the Board and Chief Executive Officer
Thank you, Mac, and thanks to everybody who’s listening and has taken the opportunity to participate in this conference call. The first thing I do really encourage you to look over the slides, particularly if you don’t have time to read the whole press release that we had. That there have been a lot of thought put into those slides to try to make important points that I believe are essential to the Matador story.
Second, if you also do not feel you’ve been given an adequate opportunity to ask questions, we want to invite each of you to come visit us at our offices where we will make sure that you’re given all-the-time that you want to ask your questions and get your answers. And in particular, we would invite you– if you do come, we will make sure that you get to have lunch with the executive team or most of the executive team that’s in town or if you’d rather we will arrange for you to meet or have breakfast or lunch with a lot of our young leaders and get to know the people who are coming up and being pillars of support and activity and are just doing a wonderful job, great job in directing our various activities and of course they’re relative had some years of experience, but they’re the ones who are actually on-the-job and the first level of supervision and executive action, which none of the seniors will be in there and give you that opportunity to get some very frank responses. And that invitation goes and just work-through Matt to set-up such a meeting.
Then what I wish to emphasize today in this conversation is the quality inventory that we procured over-time, particularly in the Delaware where I’ve been– I started Matador over 40 years ago –, 43 to be exact, and that’s where we started out in the Delaware. So we’ve got reflect over 40 years of experience and still think it’s the best rock in the country. And we like the position that we built. It’s now over 200,000 acres.
And if you’re going to my experience having started a company is when you’re in what you feel is the best rock, it’s a lot easier to build than trying to go to some of these outlined areas. So feel free to ask whatever tough questions you want on the inventory. I think our position stands out against anybody acre for acre.
Second is, I hope you’ll note the strong balance sheet that we have and that this past quarter, we increased production. Most importantly, we increased reserves by 9% as measured by Netherland and so we have a — we increased production and reduced debt. And we had strong cash-flow throughout even though prices went up-and-down throughout the last 90-day period. We believe this inventory balance sheet, the strong cash-flow all lead to growth optionality and with San, we are now have flow assurance outside the basin. The Hugh Brinson has been a change maker for us and we’re excited to work with energy transfer on that opportunity. And with that, we’ll take the questions. May?
Mac Schmitz — Senior Vice President, Investor Relations
Great. Thanks. Marvin, we’re ready for Q&A.
Questions and Answers:
Operator
Thank you. At this time, we’ll conduct a question-and-answer session. [Operator Instructions] First question comes from the line of Lee Wolf of Bank of America. Your line is now open.
Noah Lee Rose
Hey, this is Noah here. Hi, so you guys increased your net undrilled lateral footage by 2% this year. I guess, was this delineation or a result of your brick-by-brick land strategy? And were these location — where were these location adds? And you also had some pretty significant inventory adds in the Avalon, third Bone Spring carbonate and Wolfcamp D. Are you seeing something that you like from those formations?
Joseph Wm. Foran
Hey, first, I just say it was a lot more than one question so which one of those do you want Tom to answer?
Noah Lee Rose
It really just if you could on the– on the inventory adds, Rand, if you’re seeing anything you like on the Avalon third Bone Spring or Wolfcamp D.
W. Thomas Elsener
Sure. This is Tom Elsener, EVP for Reservoir Engineering. Definitely appreciate your question, and it’s something we’re very, very proud to answer. I would say the production out-of-the Avalon in particular has been has been very strong. I think we highlighted a particular well in our kind of Southern Ranger asset area called the– called the Avalon, a very strong upper Avalon well that has, you know, been a very, very-high performer. I think it’s getting close to have made over 400,000 BOE, very-high oil cuts. It’s something that we have a lot of running room in that part of the part of the basin for.
It’s something that we’ve expanded our inventory in over the years. So it’s something we see as being a big part of our campaign out in the Delaware Basin. The other zones, various ads and all throughout the position is what I would — what I would say. I’m proud that you noted the increase in footage. Our teams have been very busy doing trades, extending laterals, and we’re very proud to see the 6% increase in our average lateral length in our inventory from 2024 to 2025. We’ve noted that we’ve been drawing some 3.4 mile long laterals, particularly on our acreage that have helped us to dramatically increase our average lateral lengths.
And I think that that’s something that I would tip my hat to Chris Calvert and all the operations teams for pushing our lateral lengths out to these types of distances and doing it very, very well. I think our teams have been able to improve the quality of our inventory through good geoscience support from Andrew Parker identifying you mentioned the third carbonate was a zone that we had not originally included in our inventory several years ago, and it’s one that we’ve — we’ve drilled very successfully kind of all throughout our Delaware Basin position. Our teams had started with that target down in our Wolf area many years ago and then moved it further north into some of our properties over in Ranger and then over across into Russell Breaks, and it’s been one that has been a great add to our position.
Operator
Thank you. One moment for our next question. Our next question comes from the line of Neal Dingmann of William Blair. Your line is now open.
Neal Dingmann
Good morning, guys. I’ll make sure to keep the one question. I want to get in trouble.
Joseph Wm. Foran
Now Neil, the other thing is what maybe some of the others on the bill, you know the way to our office and you’ve been here a number of times asking these questions and we’ve always appreciated. It’s been a very useful dialogue and the guys like having you come and ask you various questions. And so they’re hoping you’ll come back.
Neal Dingmann
I appreciate that. You all have been very generous with the time, John. I definitely look-forward to getting back there soon. Joe, my question for you or Brian is really just on the ’26 plan. It seems you continue now to target free cash flow over-production growth. You look this year, great plan out there for 3% oil growth with 11% reduced capital spend. This is — I compare this to prior years where maybe you were targeting higher production growth. So my question is, you all now believe– I know you talked about value creation being sort of the key driver out there. Do you believe the key to the value-creation is just this capital and operational efficiency or what– what do you all look at as the key for this value-creation?
Joseph Wm. Foran
Well, it’s a good question. It’s a fair question. The way we do things, as you know, we like to collaborate with each other and several of us kind of lean one-way and others lean another way on what’s important. And then when we roll that all together, it comes out that I think that it depends on the time and what the nation’s economy is doing and political situation is which one you lean perhaps more on what interest rates are. And so there’s a lot of factors that go into it, as you would guess, just like what sector of the economy would you invest in. It varies from year to year and time-to-time.
But our first we begin with first saying is look for the good acreage because if you have the good acreage, banks generally have a good outcome. And it’s hard to turn bad acreage into profitable or highly profitable wells. So beginning with, is this a well that’s in the right areas and the zone that’s been properly tested or is this exploration in effect? Well. The other thing is, I lean more towards the long-term reserve growth because when you proved up the reserves, then it becomes optional when you want to complete wells in those zones and bring them — and bring them to-market, and you want to do it in a deliberate style because as you drill these wells, the more you drill them, the better your per lateral foot or footage rate is because you just are drilling them faster, you’ve learned to adapt some ways of increasing your footage and reducing your costs.
So last call we had — we were beaten up because we had grown our production, but we had also grown our capex and that capex was, you know, we took criticism for that. This quarter, we showed what we could do, the capital efficiencies that reduced capex spending by 11% and we were able to recover essentially the same amount of production. But to us most important because of the fluctuation in prices, we increased our overall reserves by 9%. That’s– that’s not our numbers, but that’s Netherland and sales numbers.
And so we thought that was a good outcome in total for the 90-day period that we increased production a little bit, 1%, but we reduced cost capex by 11% for the same amount, roughly the same amount of lateral footage and our overall reserves went up by 9%. So we thought that’s good, but you all be the judge of it and the market will be the judge of that. But we’re pretty excited that we have those numbers headed in that– that way. Production is up, costs are down and that we proved up some new zones and that we’re very excited about. And so with fewer rigs and I’ll let Chris take-over from here. He felt what was most important accomplishments for the quarter.
Christopher P. Calvert
Yeah. Hi, Neil. Chris Calvert, EVP, Chief Operating Officer. Great question. When we look at value creation, specifically long-term value creation, I think the fundamentals of your question really do kind of build the foundation of what we think that value-creation is. It’s profitability. Profitability focus, not necessarily production folks when we look at that, then we try to figure out the ways to optimize the levers that build that strategy. And so with– on the revenue side, you look at the value of Hubrinson as that comes online towards the back-end of this year to help improve gas realizations that we spoke to, the production impacts of that in the first-quarter.
You look at the capex spend, the 11% reduction, $130 million in capex savings forecasted for 2026, you know, I’d refer you to Slide 6 to look at our year-over-year improvements in well costs. And really even more specifically, I would focus you to Slide 19, which I think tells a better story that shows that we’re able to achieve these well cost reductions while delivering stronger well results. And so when we can go out and deliver 10% improvements from an EUR perspective and do it at a lower investment cost, I think being able to optimize those levers just continue to improve the fundamentals of that long-term value creation. And so I think it’s a great question, something we are hyper-focused on. The capex component of our 2026 plan is something that we are extremely thoughtful to that is going to be underpinned by efficiencies, vendor relationships in these volatile times, and we’ll look-forward to deliver that plan.
Operator
Thank you. One moment for our next question. Our next question comes from the line of Tim Rezvan of KeyBanc Capital Markets. Your line is now open.
Tim Rezvan
Hey, good morning, folks. Thank you for taking my one question. Joe and Brian, we couldn’t help but notice the second priority for 2026 in your earnings release was midstream value realization. We also saw your report aggregate San Matteo and Matador Midstream EBITDA guidance for the year. So as we think about the timeline, knowing this is a high-priority, it seems like a drop of Matador assets into San Matteo seems to be a precursor to anything. So is that something you could do now if you need to let the dust settle on the five-point continuation vehicle first?
Can you just kind of walk-through the theoretical steps we could be looking at this year? Thank you.
Joseph Wm. Foran
That’s a good one question. Let me try to answer I was try to make notes as you were asking that but no the limitation of the one question is, is we’re not limiting our time with you all after these one questions you’ve gone through, if you still got them, stay on the line. We’ll stay here as long as you want to ask them and we invite you to come see us. Now an answer to your question that you’re talking about is that we approach this on a very holistic approach and it’s not me sitting in a room and telling everybody else what to do.
We gather in here in this room, same room that we’re talking to and we thrash it out different people have different views, but when we get through, we all feel like we’ve hashed out a good plan. And we try to be nimble enough that as the economic climate changes we’ll change with it and so it’s been that kind of 90-day period in the past where you had to move cautiously or I felt my 40 years experience out here is be cautious because cautiously you have a President saying he wants $50 oil, that isn’t going to work long-term for the industry, needs to go more higher. You’ve got a world situation where you got the prospect of war in Iran, you’ve got Europe that we’re having difficulties on both sides.
They don’t like some of the things we’re doing and I don’t know who’s right or wrong, but I hope they get resolved. Europe has been a good ally for us and then you know, in our own country you have this relations with Mexico, Venezuela, you know, all those different countries that — so you have the worldview you got to take into account and so to hit, we hedged our bet, we’re 50% hedged on oil to protect the balance sheet, no matter which way we which direction we ultimately head, but we’ve taken those precautions.
We have — we’ve got great vendors. Patterson is always helpful to us on timing of rigs and quality of rigs. So it’s a complex multifaceted and we get the various department heads in here and we hash it out, making sure we’re taking all this into account. Five point has been very good to work with and that simply is a situation that they have an exit period in their fund and they’ve got a continuation fund working so that they can work-out long-term and that’s headed– that’s making steady progress. And we expect it to be resolved in the near-term. We don’t have control over that, but Five Points been a good partner and they’ve done what they’ve said they would do. And so we’re watching that. You got activities, all is important to the state of New Mexico. So you’re going to deal with government agencies like the Bureau of Land Management and like the State Land Office on these matters and what are their plans. So incorporating that in and then we really like our bank group and they’ve been very supportive and we have an RBL that of course has increased over-time as we’ve proved up more reserves, which is some we’ve taken into account.
And all night in the most recent redetermination by our bank group was that they came back and increased our borrowing base and all 9 team were unanimous in their support and even raised the amount that they had been offering on you know, on the midstream system. So we thought that was a win the whole way through. Other suppliers, B&L POPCO has been very supportive through time and we’d like to confirm what direction pipe prices are because when you’re drilling these longer laterals, you want to be sure you have the best quality pipe at the best prices. So I give credit to all of them at Halliburton on our frac designs and execution.
So I would say you’re not going to make a decision in an afternoon, but you’re going to gather together, get everybody’s proposals in there, massage them together and go from there and so it’s something that these long relationships that we have with these vendors really pays off because you just you really make that time together in planning this that much more efficient and we think that planning has played a big role in the reduction in our capex as well as the efficiency gains and like the timing in the timing that we have in drilling these wells, we’re just drilling them faster than we have in the past because everybody knows what they’re supposed to do and they — people come up with ways to expedite the operation and the drilling plants.
Chris, did I leave something out there?
Christopher P. Calvert
No, I think Joe hit on a lot. And I think to the question, Tim, you know, the relationships we have on the E&P upstream side that Joe has mentioned have been longstanding a part of the success story of the operational excellence of Matador. And I think to the story with Five Point and the continuation vehicle, I think what we’re excited about is they– they’re structuring a deal that allows them to be part of the future growth of the entity now as the dropdown conversation moves forward. I think that’s something that from the E&P side, we have referenced these 3.4 mile laterals.
We’ve referenced the productivity of the Ameredev acreage that is now in our asset-base. And so I think that is an exciting story from both the E&P side and the wholly-owned Matador ups or excuse me, Matador midstream side, the gathering side. And so I think that the cadence of any sort of dropdown, I think that’s something that we will continue to work on. But we’re excited about the continuation vehicle simply because it’s another sign of support from Five Point and they’ve been supportive of everything from plant expansions to interconnects between Marlin and Black River.
And this is just another sign that they want to be a part of the growth story.
Joseph Wm. Foran
Chris, thank that excellent. But I just want to add-on to that we’ve gotten a number of questions recently about our artificial intelligence participation. And what we found most effective is to work together with our vendors and where we can use artificial intelligence between us, most often they have the program there ahead of us maybe more often, but work together so it’s a win-win situation. And so we’re — we’re taking maybe it’s baby steps, but we are taking it in the deliberate fashion with our partners, some of whom have more experience in this area and we feel like it’s another win-win where we all are gaining from the collaboration.
Operator
Thank you. One moment for our next question. Our next question comes from the line of Zach Parham of JPMorgan. Your line is now open.
Zach Parham
Hey, thanks for taking my questions. Can you talk about how you’re thinking about using the buyback going forward? It was relatively limited over the last couple of quarters. I know you didn’t plan to be formulaic with the buybacks, but just any thoughts on how you plan to allocate free-cash flow to buybacks in the future? Thanks.
Robert T. Macalik
Yeah. Hey, Zach, this is Rob Macalik, CFO. Definitely on the shareholder return, we’re proud of the cash we’ve returned in the form of both the dividend and the share buyback. We’ve raised the dividend six times in the last four years and are really proud of the 3% yield that we have on that dividend today. We just instituted the share buyback in 2025 and we think it’s a really nice extra tool that we have at our discretion. As you can see through the management and employee share purchases, including the guys in the field, and we as a management team, feel like the stock is undervalued.
And so we’ve been trying to be prudent with our capital, but we do think that the share buyback is a nice tool that we have that we can continue to use opportunistically and feel like between the dividend and the share buyback, we are really good shareholder return tools to use. And so I think you’ll consider– continue to see us use that in a very conservative way, but use it when there’s a dislocation between our stock price and what the rest of the market is doing.
Operator
Thank you. One moment for our next question our next question comes from the line of Derrick Whitfield of Texas Capital. Your line is now open.
Derrick Whitfield
Good morning all, and thanks for your time.
Joseph Wm. Foran
Good morning. Thanks. Thanks for your time too.
Derrick Whitfield
I wanted to focus on surfactants with my question. Could you perhaps elaborate on the enhanced performance you’re seeing in your well results, the degree at which you could expand the program in 2026 and how much of this is baked into your guidance?
Christopher P. Calvert
Great, great question. This is Chris Calvert again. So I’ll start with the back part. We have not baked any sort of uplift into our 2026 production guidance plan. So I’ll put that out right now. As far as quantifying the successful results, we’re excited about the pilot test we did in 2025. We have long used surfactants throughout completions. This is something that as the technology advances, as we continue to delineate from a sub-surface perspective in the parts of the basin that we feel could be more benefited from advanced surfactants.
That was kind of the basis of our pilot test in 2025. So we’re excited about the early results. As we look into 2026, once again, that no sort of uplift is baked into the production. However, I think it’s a little early to speak to the enhancements or uplift other than the fact that we have noticed that it is formation specific. Certain formations respond a little better, but I think that could delineate and differentiate as we move into 2026 as we test in different parts of the basin. So stay tuned. We’re excited about the ’26 plan. Once again, the capital is projected into the budget, but not production.
Operator
Thank you. One moment for our next question. Our next question comes from the line of John Abbott of Wolfe Research. Your line is now open.
John Abbott
Hey, good morning, and thank you for taking our question. My question is really on the Woodford. What is the strategy there? Is your position primarily held by production? You’re drilling your first well in the first-half of this year. You have additional pipeline capacity next by the end of this year. Is there further derisking in 2027. How are you thinking about that play?
Christopher P. Calvert
Yeah. John, this is Chris. I can take it again and probably pass it to Tom. We’re excited about the Woodford. Obviously, our geoscience team has long looked at deeper parts of the basin. We’re excited about we’ve delineated and have producing wells out of 23 discrete horizons in the basin. The Woodford would be additive to that. And so we have a geoscience team who’s long looked at deeper parts of the basin. And I think if you’ve looked at public data about some of these well results in and around the zip codes in which are being reported, you’ll see that there is a nice overlap to what we think is the fairway of this basin that is existing to current Matador acreage on the map. And so we look at this as additive, and I can kick it to Tom.
W. Thomas Elsener
Hey, John. I appreciate your question on the Woodford. Yeah. This is our– this will be our first– first of all-in the Woodford. And so I would say our primary objective is to learn as much as we can about the Woodford and all the other zones of immediately adjacent to it will be drilling a pilot hole and running logs. And I know Andrew Parker can speak more to some of those things, but we do have a have a nice position over there on the Eastern side of the basin where others have had some success further over into Texas in the Woodford. Clearly, we’re very excited about it. And so it’s something that is– would be purely incremental to our current inventory. We have not yet awarded any inventory whatsoever to the Woodford. So it’d be a great win for Matador. But I’ll pass it over to Andrew Parker to speak more.
Andrew Parker
Yeah. Thanks, John. Just add-on to Chris and Tom here is we’ve had our eye on this. We’re really excited about the results in Texas and we really like our rock in New Mexico. And we think we have a lot of running room here. Again, it’s very early, but we’re excited to share more about this test later in the year. But the Woodford, it’s an important part of the petroleum system in the Delaware Basin, which this just adds to our confidence of being in the best basin here and with our confidence in our inventory across the basin as well. So we’re really excited about it. Thank you. One moment for our next question. Our next question comes from the line of Scott Hanold of RBC Capital Markets. Your line is now open.
Scott Hanold
Yeah, thanks for taking my question. You know what I can you — Matador basically built itself on the brick by brick M&A as well as organic growth. Moving forward, it looks like I think for the industry, the growth rate is obviously coming down as well as Matador. But as you– what do you see in terms of the ways to add values for going-forward? And do you see a lot of M&A opportunities left to continue to consolidate?
Van H. Singleton II
Hey, Scott, this is Van Singleton, Co-President. Thanks for your question. I think you can see from last year that our brick-by-brick approach was effective as it has been for some time and 17,500 acres without doing a major transaction, that was 690 or so individual transactions. I think you can count to see us be vigilant to protect the balance sheet, but always look for good opportunities in the future. We try to keep a pipeline of deals coming in, but they need to be the right deals in the right neighborhoods.
And so many of these are in units we have or adjacent to units that we have to form these longer laterals and we’re excited to see there’s still opportunities out there and we’ll continue to make trades that are that are good for both sides. You know, again, just like doing the deals with, they’ve been good partners to work with and we look-forward to other deals like that coming up. And if some bigger deals do come up, we’ll give them full valuation and do consideration. But we need to stick to our strategy of protecting the balance sheet and putting ourselves in a position for future growth.
Brian, do you want to add to that?
Bryan A. Erman
Yeah. Hey, Scott, this is Brian Erman, Co-President, Chief Legal Officer and Head of M&A. Just to pile on to what Ban said, I think we have shown that we can grow in different ways. We did the and advanced deals in previous years. And then as Van said, we did 17,500 net acres and essentially replaced our inventory that we drilled last year through smaller deals. And so I think that’s a differentiator for us that we can– we can grow through the bigger deals and we do think there will be some out there in the future that to look at. But in the years that those aren’t there, we can grow through the brick-by-brick approach and we really do feel like that’s a differentiator for.
Joseph Wm. Foran
Scott, this is Joe. And let’s put a little bit of this in perspective. I started as you know, with $270,000 in 1983, and today we’ve got over $10 billion in assets. So throughout that 40-year period, this same question has been asked and asked again, do you think you can grow anymore? Or has there been so much consolidation that there are not opportunities out there. We’ve always been able to find opportunities and I don’t really see it much different and that we think it’s– we aim for being better, not just bigger.
And in a lot of these situations by going after these areas like Woodford and that fits us very well. I’m not sure it fits a major, they need to be down there where they’ve got hundreds of thousands of acres. And these are smaller, but they still fit us and we consolidate that way and man and others have an active trading circle where we give up here in their area and they give back. So those arrangements are working. And as far as the profitability goes, I think we’ve proven over 40 years that we’ve managed our money well to reinvest in the right areas and even at old Matador, we were investing in the right areas there and developing trade.
So we’ve been active in each of these extensions and we’ve had merger opportunities, many merger opportunities. But so far we found this work best to be as we are. We’re a little unique in a lot of areas. And one thing is the collaboration with each other in the company as well as with our outside relationships. And a good example of this is working with clients as we have and we’ve done some they made us wear some very good ways to add to production and make sure we’re in the right areas and right equipment, What’s on pipe and what’s still on trucking and is another example is that so rather than Fred about who’s the next merger or anything, we try to work on the efficiencies and thinks it worked out pretty well that in 43 years, we moved from one rig and part of the time and having 300,000 in assets, which at the time I caused a lot of money, but not so much today when we’re drilling 3,000 feet or more and gaining efficiencies there.
So the business has changed but the basics about building relationship, being in the absolute best area you can afford and working trades to consolidate things and looking for the new technology all that you know it’s the same thing in sports is that you know it’s not you know-how big your school is but it’s often about how good your people are. I mean you look at University of Indiana hadn’t had a winning season or championship since the 1800s, the late 1800s, but then they win the national championship because they got better people. And it’s not that we can people into coming, but we do have a dedicated group of professionals who try to get better every day. And you’ve been to our office often and Scott, wouldn’t you agree that it’s a very motivated group here that works well together and has kind of a unique culture to it. But I ask that question of you if you respond.
Operator
Thank you. One moment for our next question. And our next question comes from the line of Paul Diamond of Citi. Your line is now open.
Paul Diamond
Thank you. Good morning all. Thanks for taking the call. Just wanted to touch on D&C in ’26 for a moment. You guys guided towards the midpoint of 795, talked a bit about cycle times, lateral length batch development. Just wanted to get an idea if you could parse out a little bit on how those improvements are kind of broken out amongst those groups or any other levers?
Christopher P. Calvert
Yeah. This is Chris Calvert. You kind of tailed off on the back-end of the question, but I’ll repeat it a little bit and then whatever I missed. So you said a little bit more commentary surrounding increased lateral length, reduced cycle times that led to the reduction in our D&T cost per-foot to $7.95. And so I think, Paul, you know, the first thing I would point to is when we look at this improvement in D&C cost per foot, it is largely efficiency driven. As we look to– we’ve talked a lot about these this well batch that it sits on our acres, it’s 3.4 mile laterals.
We expect to turn in line the first part of this year that is contributory to the 10% increase in lateral lengths. And so I think when we speak to the ability to do more with less, and I think that is a standard story that is somewhat spread across the industry, being able to drill the same lateral footage or accomplish the same with fewer rig counts. Stories like increased lateral length help contribute to that. And so when we look at improvements in completion efficiencies, we were kind of one of the first to do Simul and Trimul-Frac in the Delaware Basin and it has stayed a large part of our completion story.
We’ve seen completion efficiency improvements of 20% year-over-year as far as completed lateral footage per day, all of which contributes to lowering your D&C cost per-foot. And so when we think about cycle time improvements that it really underpins the ability to turn-in line the same net lateral footage in 2026 versus 2025 and do it with $130 million D&C capital savings year-over-year and then also still be able to deliver moderate production growth in the form of 2% or 3% oil organic oil volumes. And so I think you know the underpinning story to the $7.95 number is largely efficiency driven focused on, like I said, longer laterals and reduced cycle times.
Operator
Thank you. One moment for our next question. And our last question comes from the line of Phillip Jungwirth with BMO. Your line is now open.
Phillip Jungwirth
Yeah, thanks. I was hoping you could talk about the better wells for less money slide and just what I was really interested in is first the forecasting of EURs and the bottom-up build here? And then just second, the footnote around excluding wells drilled by Meredith [Indecipherable] and whether this has been a drag on historical EORs and if Matador designed wells are demonstrating improvement across this acreage.
W. Thomas Elsener
Hey, Philip, it’s Tom Elsener, EVP for Reservoir Engineering. I’ll take the– I’ll take the first part of that one. What we’re really proud of is the continued improvement in our well productivity over these years and really highlighted by our own operations and showing that how we’ve been able to improve our BO per foot of lateral year-over-year, it’s something we’re really proud of. It’s not something that just comes very easily. It comes from a combination of improved targeting, improved spacing, improved completions, many of the different operational improvements that Chris has been lining out, but also from our geoscience teams finding better places to buy acreage, better places to land the wells.
You combined with the approximately 25% improvement in cost per-foot over these years, those are some very big improvements to the rates of returns, to the quality of the inventory. And we’re certainly very proud of the of the Meredith acreage and the Advanced acreage. And those have been great acquisitions for us. As this has been mentioned on the deal front, we’ve been very successful with big deals and the smaller brick-by-brick transaction. So Matador has improved its portfolio over the years through a wide– a wide range of different techniques.
Joseph Wm. Foran
You know, if I tag on to your note, Tom, it’s just that as an example of this, of these efficiencies, it isn’t just it makes the well better, but it has generated additional cash-flow that we’ve been able to pay-down our debt some. And last year, for example, we paid it down by $200 million. So we were getting our leverage ratio down there to about one, which gives you more options having that kind of balance sheet strength. And so we tie those together in our discussions that I mentioned when we elaborate. What does this — what does this mean?
Operator
Thank you, ladies and gentlemen. This ends the Q&A portion of this morning’s conference call. I’d like to turn the call over to management for any closing remarks.
Joseph Wm. Foran
Well, I’d just like to say if anybody else on the call doesn’t feel that they got your questions answered, please give a call in to Mac and we’ll arrange a separate conference call. But we want to make ourselves available to you because we think there’s a lot of good progress is being made and we’re very excited about some of these new areas that we’re developing. It’s just hard to always fit it in a 90-day period. But as this year goes along, I think you’re going to see why we were as optimistic about the year as we have been and hope that oil prices will stabilize and that some of the disruptions will be settled over-time and then the economy will remain strong.
But I give much credit to this team, has continued to grow and to work that much better together and reiterate our invitation, become see it and meet the people in-person that have a direct effect on the value of the company and then meet some of the younger people because I think they’ve done a very impressive job. You know, with that, I want to be sure, give a shout-out to Lynn and Glenn and hadn’t called on to say much, but he’s watched over both the production and the midstream and kept both of them running even in bad weather and other times and so Glen if you want to say anything, please do so now and if you want me to ask you a question first to give you a structure to do that, but you watching over those two very important areas that got work together, the production and the midstream.
Glenn W. Stetson
That’s right. Yeah, thank you, Joe. This is Glenn, EVP of Production. I think Tom and Chris both gave examples of things that we’re doing on the efficiency side. I would like to provide an example of where both Matador, San Matteo and on the completion side, the production side and the midstream companies that work together to achieve some of those efficiencies. And one of them is on the produced water side, using hydraulic– using produced water for hydraulic fracturing operations. In 2025, 72% of the water that we used was produced water and that has the benefit of both reducing our capex per-foot, but also reducing our lease operating expenses. And we couldn’t do– we couldn’t achieve those results without the help of San Matteo and Matador’s midstream– wholly-owned midstream properties or asset. And so I just wanted– that’s just another area of where we are working together to help on all fronts.
Joseph Wm. Foran
And trying to help put the flow assurance, the importance of flow assurance into perspective is if you’re going to– as I often heard some of you’ve heard me say it, if you’re going to be a cotton farmer in Dawson County, Texas, you better own — also try to own part of the cotton because you got a gyn your cotton before it gets to-market. And it’s the same thing. After we produce the gas, it’s got to be collected by midstream entity and then taken the market. So we started in on that view when we went public — when first Matador went public back in 2012 that it was important over the long-run to have an interest in the midstream to be sure you had flow assurance and that’s delivered a lot of benefit to us through time.
Now we’re not cotton farmers, but I believe it’s an apt analogy.
Mac Schmitz
Marvin, with that, that concludes our closing remarks. Thank you.
Operator
[Operator Closing Remarks]