And really, last quarter, changing that guidance and reducing it from the 5.25 to 5.75 on a per unit basis down to the 5 to 5.50. So anyhow, we have seen after taking over Advance, realizing those savings enough that even last quarter, we were able to reduce our projections and kept those the same for Q4.
Rob Macalik: And Leo, this is Rob Macalik, I am the EVP and Chief Accounting Officer. So two things kind of moved in our favor since the last quarter. One of those, we estimated higher 2023 revenue, both because of production and price, and we had lower operating and capital cost estimates for the year. So that led to a little bit higher estimated taxable income and thus our estimate of about a 1% cash tax payment that we’ll make for the year. We’re obviously doing everything we can to plan for that and to work on our deduction that we can to minimize our income tax payments for 2024. There are a few things that we’re still analyzing and studying in addition to the plans for the year. We’re also waiting for IRS guidance on the corporate alternative minimum tax, which would be a 15% book tax. But we think there are several things in the guidance that we’re waiting for that we’re going to be able to do better than that.
Leo Mariani: Okay. That’s helpful, guys. And I was also hoping if you guys could talk a little bit on M&A. There’s obviously been some significant deals done in the Permian here in 2023. You guys obviously, did one of those with the Advance deal, how are you kind of thinking about it going forward? Do you think the focus is kind of more ground game, kind of brick-by-brick approach here, or do you think that there may be some larger deals that Matador could eventually be involved?
Joe Foran: Well, this is Joe. And I’d emphasize that if I being in a football game. Are you going to run more? Are you going to pass more? It all depends on the opportunities and how things go. We try to make sure we have enough of a ground game every year that we’re going to hit our growth and production increase cash — free cash flow increase, pay down debt, they are all those essentials. And on the acquisition side, we tend to just be opportunistic. We don’t do a lot, but you can see in our history that when we’ve done bills, they’ve been accretive to what we’re trying to do and has enhanced the ground game. So we’re open to a client — we’re more of an acquirer than we are a seller and – but – and so we’re very open to buying something, but we wanted to make sense.
We are not trying to get bigger as much as we’re trying to get better and to acquire interest in our existing wells from people or something like that has a fit to our acreage positions or midstream. And so we’re always open for deals. Van, can you comment, you are a lead guy on this.
Van Singleton: Yes, Joe, I think what you’re saying is right. And I think you guys have heard this from us for a decade or so that we’re always on the lookout for good deals. We’re going to make sure that we keep the balance sheet strong and when opportunities present themselves that we feel like are going to give our acreage position enhancement, whether it be in existing units or expanding into new units, we’re going to take a hard look at it. And if the deal is right, we’ll do it. But I think Joe is right, we’re buyers. And we’re always looking.
Leo Mariani: Thanks
Operator: Thank you. Our next question comes from the line of Trafford Lamar of Raymond James.
Trafford Lamar: Hi guys. Thanks for taking my questions. The first one I have, it circles around the Horseshoe wells. How did the cycle times on these wells compare to your more standard two-mile laterals? Just any color on that would be great.
Chris Calvert: Yes. Trafford, this is Chris Calvert, EVP and COO. I think cycle times when we look at these, I want to always remind people, these were part of a larger nine-well batch these two Horseshoe wells. But from a reference point, for example, looking back to a previous — our previous record for drilling a two-mile Wolfcamp A in our Wolf asset area. One of these Horseshoe actually beat that record by about 20% from a spud to TD. So when you think about just cycle times, it’s hard to put a number on it because it’s highly dependent on the quantity of wells within the batch. But from just drilling times, completion times, they’re very comparable to a straight two-mile lateral. I think we kind of like the joke. The drill bit doesn’t necessarily know.
It’s drilling a U-turn at just with the new technologies, whether it’s new bid technologies, new motor technologies, we continue to go out and perform, whether it’s a U-turn well like we did on this or other two-miles, 2.5 and even 2.7 that we’re looking to put online here in the next year. It’s just always about continuing to drill fast and reduce those cycle times.
Trafford Lamar: Perfect. I appreciate that, Chris. And then just a quick one here. Just to clarify, have you already signed the contract and secured the additional 8th rig for 1Q, ’24, or is that happening later this quarter?
Chris Calvert: It’s — this is Chris again. It’s likely to happen here in the short term here in the next week or two, few weeks, whatever it could be, once again, leaning into that and valuing the relationship with Patterson. It is — right now, we have an understanding that we will be adding in rig in the first quarter of next year. Obviously, highly predicated on the super-spec capabilities of that rig to make sure it’s drilling wells in a manner that we’ve grown used to and so, that’s kind of the storyline there.
Trafford Lamar: Great. I appreciate it. Thanks, guys.
Operator: Thank you. Our next question comes from the line of Kevin MacCurdy of Pickering Energy Partners.
Kevin MacCurdy: Hey. Good morning, Joe and team. Just one question for me today. We noticed realized oil prices have gone back to being above WTI, both through actuals in third quarter and the guidance for fourth quarter. I wonder if you could talk about what you’re seeing there that has improved over the first couple of quarters earlier this year.
Brian J. Willey: Yes. This is Brian, and I think Gregg can feel free to chime in as well. But I think just looking at the prices, I think part of it’s the role as we’ve looked at this historically and just how the price is calculated in the realized pricing. And so, that’s something that we saw an impact from looking at second quarter to third quarter and even first quarter, second quarter. And so, I think as we look forward going into the future, I think that’s a big piece of it is just how the role plays in effect in the realized pricing. Also, I’ll just say, I think one of the big benefits we have is that a lot of the marketing team has done a very good job in getting much of our oil on pipe. And so I think that’s really significant because we are able to save cost there and be able to incur the savings, thereby getting a higher realized price. But Gregg, I don’t know if you have anything else you want to add?
