Market Trends - The Santa Claus Rally is anticipated as a familiar market trend, historically resulting in stock increases 80% of the time during this period since 1972 [1] - This year's rally is expected to be accompanied by volatility due to factors such as AI speculation, a weakening labor market, and record-low consumer sentiment [2] Labor Market and Layoffs - October saw over 150,000 layoffs, the highest figure in 20 years, impacting companies including Amazon, which laid off 14,000 corporate employees [2] Stock Market Performance - The tech-heavy Nasdaq Index fell 5% recently, indicating cracks in the bull market, with Amazon shares dropping 6% [3] Investment Opportunities - Utz Brands Inc. (UTZ) is highlighted as an attractive investment, trading at 13 times forward earnings, significantly lower than its long-term average, with a profit outlook of 5% growth this year and 15% next year [12] - Greenwich LifeSciences Inc. (GLSI) is noted for its potential in cancer immunotherapy, with recent insider buying and FDA Fast Track designation, despite a 33% decline in shares due to short selling [15][19] - Matador Resources Co. (MTDR) is recognized for its strong insider buying activity and attractive cost structure, trading at a low valuation compared to peers, with a 4% dividend yield [22][25][26] Insider Buying as a Bullish Signal - Insider buying is considered a strong bullish signal, with examples of significant gains following such activity in companies like Longeveron Inc. and Nuvation Bio Inc. [14][27] Upcoming Events - A Profit Surge Event is scheduled, where insights on market volatility and trading opportunities will be shared [7][28]

Core Insights - Matador Resources Company (NYSE:MTDR) is identified as a stock with exponential growth potential heading into 2026, reporting record production figures for Q3 2025 [1] Financial Performance - In Q3 2025, Matador Resources achieved a record production of 209,184 barrels of oil and natural gas equivalent (BOE) per day, exceeding the midpoint of July 2025 guidance by 5% [1] - The company raised its full-year production guidance for FY 2025 from a range of 200,000 to 205,000 BOE per day to a new range of 205,500 to 206,500 BOE per day [3] - Matador Resources increased the number of operated wells expected to be drilled and turned to sales in FY 2025 from 106.3 net operated wells to 118.3 net operated wells [3] Strategic Initiatives - The company emphasized its 'brick-by-brick' land acquisition strategy and selective lease acquisition program, enhancing the quality and potential of its over 200,000 net acre land position in the Delaware Basin [2] - During Q3 2025, Matador completed over $125 million in transactions in key areas, further solidifying its operational footprint [3]

Core Insights - Matador Resources reported revenue of $939.02 million for the quarter ended September 2025, reflecting a 4.4% increase year-over-year and a 6.3% surprise over the Zacks Consensus Estimate of $883.36 million [1] - The company's EPS was $1.36, down from $1.89 in the same quarter last year, with an EPS surprise of 11.48% compared to the consensus estimate of $1.22 [1] Financial Performance Metrics - Average Daily Production Volumes for oil were 119,556 BBL/D, exceeding the analyst estimate of 117,874.80 BBL/D [4] - Average Daily Production Volumes for natural gas were 537.8 million cubic feet per day, surpassing the estimate of 498.45 million cubic feet per day [4] - Total oil equivalent production was 209,184 million barrels per day, above the estimate of 201,142.9 million barrels per day [4] Revenue Breakdown - Oil and natural gas revenues totaled $810.24 million, exceeding the average estimate of $798.5 million and representing a 5.2% year-over-year increase [4] - Third-party midstream services revenues were $43.83 million, slightly above the estimate of $43.34 million, marking a 14.4% increase year-over-year [4] - Oil revenues reached $713.95 million, compared to the estimate of $671.13 million, reflecting a 2.2% year-over-year change [4] - Natural gas revenues were $96.29 million, below the estimate of $118.54 million, but still showing a 34.2% year-over-year increase [4] - Sales of purchased natural gas generated $61.04 million, compared to the estimate of $67.43 million, representing an 18.2% year-over-year increase [4] Stock Performance - Matador's shares have declined by 19.8% over the past month, while the Zacks S&P 500 composite has increased by 2.5% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Matador Resources (MTDR) reported revenue of $939.02 million for Q3 2025, a year-over-year increase of 4.4% and a surprise of +6.3% over the Zacks Consensus Estimate of $883.36 million [1] - The EPS for the same period was $1.36, down from $1.89 a year ago, with an EPS surprise of +11.48% compared to the consensus estimate of $1.22 [1] Financial Performance Metrics - Average Daily Production Volumes: - Oil: 119,556 BBL/D, exceeding the estimated 117,874.80 BBL/D [4] - Natural Gas: 537.8 million cubic feet per day, surpassing the estimated 498.45 million cubic feet per day [4] - Total Oil Equivalent: 209,184 million barrels of oil equivalent per day, above the estimated 201,142.9 million barrels [4] - Average Sales Prices: - Natural Gas (with realized derivatives): $2.03, below the estimated $2.46 [4] - Oil (with realized derivatives): $64.91, slightly above the estimated $64.51 [4] - Oil (without realized derivatives): $64.91, below the estimated $65.38 [4] - Natural Gas (without realized derivatives): $1.95, below the estimated $2.29 [4] - Revenue Breakdown: - Oil and Natural Gas Revenues: $810.24 million, exceeding the estimated $798.5 million, representing a +5.2% year-over-year change [4] - Third-party Midstream Services Revenues: $43.83 million, above the estimated $43.34 million, with a +14.4% year-over-year change [4] - Oil Revenues: $713.95 million, surpassing the estimated $671.13 million, reflecting a +2.2% year-over-year change [4] - Natural Gas Revenues: $96.29 million, below the estimated $118.54 million, with a +34.2% year-over-year change [4] - Sales of Purchased Natural Gas: $61.04 million, below the estimated $67.43 million, with an +18.2% year-over-year change [4] Stock Performance - Matador's shares have returned -15.8% over the past month, contrasting with the Zacks S&P 500 composite's +1.3% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Production and Revenue - For Q3 2025, total oil equivalent production was 19.2 million BOE, with average daily production of 209,184 BOE per day, comprising 57% oil and 43% natural gas[128]. - Average daily oil production increased by 19% year-over-year to 119,556 Bbl per day, while average daily natural gas production rose by 26% to 537.8 MMcf per day[128]. - Oil and natural gas revenues increased by $40.1 million, or 5%, to $810.2 million for the three months ended September 30, 2025, compared to $770.2 million for the same period in 2024[143]. - Oil revenues rose by $15.6 million, or 2%, to $713.9 million for the three months ended September 30, 2025, driven by a 19% increase in oil production to 11.0 million Bbl[143]. - Natural gas revenues increased by $24.5 million, or 34%, to $96.3 million for the three months ended September 30, 2025, due to a 26% rise in natural gas production to 49.5 Bcf[143]. - For the nine months ended September 30, 2025, oil and natural gas revenues increased by $286.0 million, or 13%, to $2.54 billion compared to $2.25 billion for the same period in 2024[148]. - Oil revenues for the nine months ended September 30, 2025, rose by $180.2 million, or 9%, to $2.18 billion, supported by a 27% increase in oil production to 32.5 million Bbl[148]. - Natural gas revenues increased by $105.8 million, or 43%, to $353.3 million for the nine months ended September 30, 2025, driven by a 29% increase in natural gas production to 141.7 Bcf[148]. Financial Performance - Net income attributable to Matador shareholders for Q3 2025 was $176.4 million, or $1.42 per diluted share, down from $248.3 million, or $1.99 per diluted share in Q3 2024[130]. - Adjusted EBITDA for Q3 2025 was $566.5 million, compared to $574.5 million in Q3 2024[130]. - For the nine months ended September 30, 2025, net income attributable to Matador shareholders was $566.7 million, or $4.54 per diluted share, down from $670.8 million, or $5.44 per diluted share in the same period of 2024[131]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $1.80 billion, an increase from $1.66 billion in the same period of 2024[131]. - Total expenses for Q3 2025 were $633.0 million, up from $507.7 million in Q3 2024, while operating income decreased to $306.0 million from $392.1 million[154]. - Net cash provided by operating activities increased by $278.6 million to $1.95 billion for the nine months ended September 30, 2025, compared to $1.67 billion in 2024, driven by increased oil and natural gas production[182][183]. - Net cash used in investing activities decreased by $1.71 billion to $1.57 billion for the nine months ended September 30, 2025, primarily due to a $1.83 billion decrease in expenditures related to the Ameredev Acquisition[182][184]. - Net cash used in financing activities increased by $1.96 billion to $379.3 million for the nine months ended September 30, 2025, compared to net cash provided of $1.58 billion for the same period in 2024[185]. Expenses and Costs - Production taxes, transportation, and processing expenses increased by $10.3 million, or 14%, to $83.1 million for Q3 2025 compared to Q3 2024, primarily due to a 22% increase in total oil equivalent production[155]. - Lease operating expenses rose by $20.7 million, or 24%, to $107.5 million for Q3 2025, attributed to an increased number of wells operated, including 204 from the Ameredev Acquisition[156]. - Plant and other midstream services operating expenses increased by $6.8 million, or 16%, to $50.5 million for Q3 2025, driven by increased throughput volumes from Matador's midstream assets[157]. - Depletion, depreciation, and amortization expenses increased by $62.5 million, or 26%, to $305.4 million for Q3 2025, primarily due to a 22% increase in total oil equivalent production[158]. - General and administrative expenses increased by $8.0 million, or 28%, to $36.8 million for Q3 2025, mainly due to increased compensation expenses and new hires[159]. - For the nine months ended September 30, 2025, production taxes, transportation, and processing expenses increased by $40.0 million, or 18%, to $259.7 million compared to the same period in 2024[162]. - Lease operating expenses for the nine months ended September 30, 2025, increased by $77.6 million, or 32%, to $319.8 million, reflecting a 4% increase in expenses per BOE[163]. - Depletion, depreciation, and amortization expenses for the nine months ended September 30, 2025, rose by $208.8 million, or 31%, to $889.8 million, driven by a 28% increase in total oil equivalent production[165]. Capital Expenditures and Dividends - The 2025 capital expenditure budget for drilling, completing, and equipping was increased to a range of $1.47 to $1.55 billion[133]. - Quarterly cash dividends were increased to $0.375 per share, with a declaration for payment on December 5, 2025[134]. - The Board declared a quarterly cash dividend of $0.375 per share of common stock, an increase from $0.3125 per share in previous quarters[171]. - The Share Repurchase Program authorized up to $400.0 million, with 1,232,828 shares repurchased at a total cost of $50.7 million for the nine months ended September 30, 2025[172]. Debt and Financing - As of September 30, 2025, total borrowings included $285.0 million under the secured revolving credit facility and $2.15 billion in senior notes[136]. - San Mateo's secured revolving credit facility was modified to increase lender commitments from $800.0 million to $850.0 million[137]. - The San Mateo Credit Facility was modified to increase lender commitments from $800.0 million to $850.0 million, with $815.0 million in borrowings outstanding as of September 30, 2025[176]. - Total interest expense for the nine months ended September 30, 2025, was approximately $176.8 million, an increase from $135.1 million for the same period in 2024, primarily due to an $804.5 million increase in senior notes outstanding related to the Ameredev Acquisition[167][168]. - Interest expense increased by $14.5 million for the three months ended September 30, 2025, compared to the same period in 2024[195]. - Interest expense on the $500.0 million of outstanding 2028 Notes is expected to be approximately $34.4 million each year until maturity[198]. Market Conditions and Risks - For Q3 2025, oil prices averaged $64.97 per Bbl, down from $75.27 per Bbl in Q3 2024, reflecting a decrease of approximately 16.3%[205]. - Natural gas prices averaged $3.07 per MMBtu in Q3 2025, an increase from $2.23 per MMBtu in Q3 2024, representing a rise of approximately 37.7%[206]. - The Waha-Henry Hub basis differential averaged ($2.40) per MMBtu for the nine months ended September 30, 2025, indicating significant volatility in pricing[209]. - The Midland-Cushing oil price differential was approximately +$0.67 per Bbl as of October 21, 2025, highlighting ongoing volatility in oil pricing[208]. - Inflation in oilfield service costs, including diesel and labor, may impact future operational costs and margins[212]. - Regulatory changes and commodity price volatility pose significant risks to the company's financial condition and operational results[203]. - The company is subject to extensive federal, state, and local regulations, which increase operational costs and affect profitability[216]. Derivative Instruments and Risk Management - The company uses derivative financial instruments, including costless collars and swap contracts, to manage price risks related to oil, natural gas, and NGLs[220]. - As of September 30, 2025, the company had various costless collar contracts in place to mitigate exposure to oil and natural gas price volatility[223]. - The fair value of derivative financial instruments is determined using market information from similarly traded securities[222]. - The company anticipates entering into additional derivative financial instruments to cover a significant portion of future production[220]. - A net gain of approximately $13.6 million was realized on natural gas basis differential derivative contracts during the first nine months of 2025[210]. - The company had no open contracts associated with NGL prices as of September 30, 2025[223].

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Financial Data and Key Metrics Changes - The company reported over $3 billion in retained earnings for the first time this quarter, a significant improvement from an accumulated deficit just three and a half years ago [13] - The leverage ratio stands at 0.4, indicating a strong balance sheet [13] - The company paid down $670 million of its revolving debt over the past year and has approximately $2 billion in liquidity, providing flexibility for future opportunities [14] Business Line Data and Key Metrics Changes - The capital program includes 12 additional wells with a rate of return exceeding 50%, particularly in the Antelope Ridge area, which has some of the highest estimated ultimate recoveries (EURs) [10] - Well costs have been reduced from an initial guidance of $880 per completed lateral foot to a revised range of $835-$855, resulting in capital savings of approximately $50-$60 million [10][11] - The company expects to turn on about 1.2 million net lateral feet this year, with a positive outlook for 2026, anticipating 13.6 net wells to be turned on at the beginning of January [11][12] Market Data and Key Metrics Changes - The company has maintained a strong position in the Dallas-Fort Worth area, being recognized as one of the larger companies in the region [6] - The midstream business is performing well, processing a record 533 million cubic feet per day of natural gas [40] Company Strategy and Development Direction - The company plans to continue its capital spending strategy while balancing production growth and capital efficiency [17][19] - There is a focus on maintaining optionality in capital decisions, allowing for adjustments based on market conditions [25] - The midstream business is seen as a critical component, providing fee-based revenue that is less affected by commodity price fluctuations [42] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the potential for continued growth and the ability to adapt to changing market conditions [76] - The company is confident in its operational efficiencies and the quality of its assets, which are expected to yield strong returns even in lower oil price environments [66][76] Other Important Information - The company raised its dividend by 20% this quarter, marking the fourth increase in seven years [14][22] - Management emphasized the importance of maintaining strong relationships with service companies to enhance operational efficiency [36] Q&A Session Summary Question: On operational efficiency and capital spending decisions - Management indicated that decisions on capital spending are a balance between production growth and cost efficiency, influenced by various factors including oil prices and operational efficiencies [17][18] Question: Opportunities for continued efficiency gains - Management noted that there are still opportunities for efficiency improvements, particularly in completion operations and logistics [29] Question: Impact of oil market conditions on spending decisions - Management stated that they do not solely rely on oil prices for capital decisions, considering other factors such as operational efficiencies and the quality of prospects [34][36] Question: Growth outlook for the water handling business - Management highlighted a significant investment in water handling capabilities, which is expected to enhance operational efficiency and reduce costs [54][55] Question: Natural gas pricing outlook - Management discussed the anticipated relief in capacity issues in the Waha market due to new pipeline projects coming online in 2026, which should improve gas pricing [59][61] Question: Well productivity expectations - Management expects well productivity to remain strong in 2026, with longer lateral lengths contributing positively to overall performance [65][66] Question: Impact of increased activity on midstream volumes and EBITDA - Management indicated that growth in Matador often leads to growth in the San Mateo midstream business, with plans for significant capital expenditures to support this growth [70][71]

Financial Data and Key Metrics Changes - The company reported over $3 billion in retained earnings for the first time this quarter, a significant improvement from an accumulated deficit just three and a half years ago [12] - The leverage ratio stands at 0.4, indicating a strong balance sheet [12] - The company paid down $670 million of its revolving debt over the past year and currently has about $2 billion in liquidity [13] Business Line Data and Key Metrics Changes - The capital program includes 12 additional wells with a rate of return exceeding 50%, particularly in the Antelope Ridge area [9] - Well costs have been reduced from an initial guidance of $880 per completed lateral foot to a revised range of $835 to $855, resulting in capital savings of approximately $50 to $60 million [10][12] - The company expects to turn on roughly 1.2 million net lateral feet this year, with a positive outlook for 2026 [10][11] Market Data and Key Metrics Changes - The company is positioned to achieve a 2% to 5% organic growth rate in 2026, supported by accelerated operations and strong project economics [11] - The midstream business processed a record 533 million cubic feet per day of natural gas last quarter, indicating robust performance [40] Company Strategy and Development Direction - The company plans to continue raising dividends, having increased it by 20% this quarter, marking the fourth increase in seven years [13][22] - There is a focus on maintaining optionality in capital spending decisions, allowing flexibility based on market conditions [24] - The management emphasizes the importance of operational efficiency and cost reductions in decision-making processes [36][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate lower oil prices, citing strong operational efficiencies and a solid balance sheet [75] - The company is optimistic about future opportunities, with a strong inventory of projects and a favorable outlook for 2026 [76] Other Important Information - The company highlighted the importance of its midstream operations, which provide fee-based revenue and enhance overall stability [40][44] - The management team has a high level of employee participation in stock purchases, indicating confidence in the company's future [73] Q&A Session Summary Question: On operational efficiency and capital spending decisions - Management discussed the balance between capital spending and production growth, emphasizing that decisions are based on multiple factors, not solely oil prices [18][20] Question: On efficiency gains and future projections - Management indicated that there is still room for efficiency improvements, particularly in completion operations, and expects to enhance these gains in 2026 [28] Question: On oil market conditions and spending decisions - Management acknowledged the potential for an oversupplied oil market in 2026 and stated that they would adjust spending based on market conditions [32][34] Question: On natural gas pricing and pipeline capacity - Management discussed the expected relief in Waha pricing due to new pipeline capacity coming online in 2026, which should improve market conditions [58][61] Question: On well productivity expectations - Management expects well productivity to remain strong in 2026, with longer laterals and improved capital efficiencies anticipated [66] Question: On midstream activity and EBITDA outlook - Management noted that growth in Matador's operations would positively impact San Mateo's volumes and EBITDA, with significant capital expenditures planned for midstream projects [70]

Financial Data and Key Metrics Changes - The company reported a significant increase in retained earnings, surpassing $3 billion for the first time, compared to an accumulated deficit just three and a half years ago [13] - The leverage ratio stands at 0.4, indicating a strong balance sheet [13] - The company paid down $670 million of its revolving debt over the past year, maintaining approximately $2 billion in liquidity [13] Business Line Data and Key Metrics Changes - The capital program includes 12 additional wells with a rate of return exceeding 50%, particularly in the Antelope Ridge area, which is noted for high estimated ultimate recoveries (EURs) [9][11] - Well costs have been reduced from an initial guidance of $880 per completed lateral foot to a revised range of $835 to $855, resulting in capital savings of approximately $50 to $60 million [10][14] Market Data and Key Metrics Changes - The company is positioned to benefit from a positive outlook for 2026, with expectations of 2% to 5% organic growth driven by strong project economics and reduced well costs [11][14] - The midstream business is performing well, processing a record 533 million cubic feet per day of natural gas, contributing positively to overall revenue [45] Company Strategy and Development Direction - The company plans to continue its focus on capital efficiency and operational improvements, with a strong emphasis on maintaining flexibility in capital spending based on market conditions [25][39] - There is a commitment to opportunistic share buybacks and continued dividend increases, with a 20% dividend raise announced this quarter [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate fluctuating oil prices, emphasizing the importance of operational efficiency and long-term production potential [39][88] - The management team highlighted the importance of maintaining a strong balance sheet and the ability to adapt to market changes, ensuring that capital decisions are made with a long-term perspective [88][90] Other Important Information - The company has a robust inventory of projects with returns greater than 50%, even at lower oil prices, indicating resilience in its operational strategy [14][15] - The midstream segment is expected to continue growing, with significant investments planned to enhance water handling capabilities and support upstream operations [60] Q&A Session Summary Question: On operational efficiency and capital spending decisions - Management indicated that decisions on capital spending are a balance between increasing production growth and managing costs, with a focus on long-term returns rather than short-term oil price fluctuations [20][22] Question: Opportunities for continued efficiency gains - The company sees potential for further efficiency improvements in completion operations and logistics, with plans to increase the use of advanced techniques like trimal frac [30][31] Question: Impact of oil market conditions on spending - Management acknowledged that while oil prices influence decisions, operational efficiencies and the quality of projects are also critical factors in determining capital allocation [39][42] Question: Well productivity expectations - The company expects well productivity to remain strong in 2026, with longer lateral lengths anticipated to enhance overall performance [73][74] Question: Midstream business growth outlook - The midstream business is expected to benefit from increased activity in upstream operations, with a significant portion of revenues tied to Matador's growth [81]