Core Insights - Matador Resources Company (MTDR) reported second-quarter 2025 adjusted earnings of $1.53 per share, exceeding the Zacks Consensus Estimate of $1.29, but down from $2.05 in the same quarter last year [1][9] - Total revenues reached $895.3 million, falling short of the Zacks Consensus Estimate of $905 million, yet showing an increase from $847.1 million year-over-year [1] Production Performance - The company's record total production volumes and lower operating expenses contributed to better-than-expected quarterly earnings, although these were partially offset by lower commodity price realizations [2] - Average daily oil production was 122,875 barrels, a 0.4% increase from anticipated figures, and significantly higher than 95,488 barrels per day in the prior-year quarter [4][6] - Total oil equivalent production in Q2 was 209,013 BOE/D, reflecting a 30.4% increase from 160,305 BOE/D in the year-ago quarter [7] Commodity Pricing - The average sales price for oil was $64.34 per barrel, down from $81.20 a year ago and lower than the projected $65.55 [5] - Natural gas price was $2.05 per thousand cubic feet (Mcf), up from $2 in the year-ago quarter but below the estimate of $3.28 [5] Operating Expenses - Operating expenses per BOE decreased to $29.91 from $30.64 in the prior year, also below the estimate of $30.54 [10] - Plant and midstream services' operating expenses fell to $2.40 per BOE from $2.55, while lease operating costs increased to $5.56 per BOE from $5.42 [8][10] Financial Position - As of June 30, 2025, MTDR had cash and restricted cash of $86.8 million and long-term debt of $3,286 million [11] - The company spent $367.1 million on well drilling, completion, and equipment in the second quarter [11] Future Outlook - For 2025, Matador Resources expects average daily oil equivalent production to be between 200,000-205,000 BOE/D, indicating a 1.3% increase from previous guidance [12] - The company has reiterated its total capital expenditure forecast for 2025 at $1.30-$1.55 billion [12]

Financial Performance - Matador achieved record quarterly oil equivalent production of 209,013 BOE/d in Q2 2025[8, 14] - The company's leverage ratio stood at 096x as of June 30, 2025[26] - Adjusted Free Cash Flow for Q2 2025 was $1327 million[46, 90] - Matador bought back 11 million shares in Q2 2025 at an average repurchase price of $4037, representing approximately 1% of shares outstanding[31] Capital Expenditure and Efficiency - Q2 2025 D/C/E CapEx was $3453 million, $15 million less than the midpoint of guidance[14] - Q2 2025 Midstream CapEx was $562 million, $4 million less than the low end of guidance[14] - Drilling and Completion Cost decreased to $825 per completed lateral foot in Q2 2025[20] Production and Guidance - Oil production guidance for Q3 2025 is 1165 to 1180 MBbl/d, and natural gas production is 4920 to 4980 MMcf/d[62] - Total production guidance for Q3 2025 is 1985 to 2010 MBOE/d[62] - The company expects to turn to sales 135 gross (1063 net) operated horizontal wells in 2025, with an average completed lateral length of approximately 10,300 feet[60, 64] Midstream Operations - San Mateo's Adjusted EBITDA for 2025 is estimated at $285 million[70] - The Marlan Plant expansion was completed on time and on budget in May 2025, with a gas processing capacity of 720 MMcf per day and a water disposal capacity of 475,000 Bbl per day[23]

Group 1 - Matador Resources (MTDR) reported quarterly earnings of $1.53 per share, exceeding the Zacks Consensus Estimate of $1.29 per share, but down from $2.05 per share a year ago, representing an earnings surprise of +18.61% [1] - The company posted revenues of $895.31 million for the quarter ended June 2025, which was a 0.81% miss against the Zacks Consensus Estimate, but an increase from $847.14 million year-over-year [2] - Matador has surpassed consensus EPS estimates four times over the last four quarters and topped consensus revenue estimates three times during the same period [2] Group 2 - The stock has underperformed the market, losing about 11.4% since the beginning of the year, while the S&P 500 has gained 7.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is $1.54 on revenues of $939.15 million, and for the current fiscal year, it is $6.18 on revenues of $3.8 billion [7] Group 3 - The Zacks Industry Rank indicates that the Oil and Gas - Exploration and Production - United States sector is currently in the bottom 28% of over 250 Zacks industries, which may impact stock performance [8] - The estimate revisions trend for Matador was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6]

Production and Operational Performance - Matador achieved record production of 209,013 BOE/d in Q2 2025, a 30% year-over-year increase from 160,305 BOE/d in Q2 2024[23] - The full-year 2025 production guidance was increased to a range of 200,000 to 205,000 BOE/d, up from the previous range of 198,000 to 202,000 BOE/d[18] - Average daily oil equivalent production is expected to decline to approximately 199,750 BOE per day in Q3 2025, before increasing again in Q4 2025[37] - Net oil production volumes increased to 11,182 MBbl in Q2 2025 from 10,353 MBbl in Q1 2025, representing a 7.99% sequential growth and a 28.83% increase year-over-year from 8,689 MBbl in Q2 2024[50] - Natural gas production reached 47.0 Bcf in Q2 2025, up from 45.1 Bcf in Q1 2025, marking a 4.21% sequential increase and a 32.39% increase from 35.4 Bcf in Q2 2024[50] - Total oil equivalent production rose to 19,020 MBOE in Q2 2025, a 6.36% increase from 17,877 MBOE in Q1 2025 and a 30.25% increase from 14,588 MBOE in Q2 2024[50] Financial Performance - The company generated net cash provided by operating activities of $501 million and adjusted free cash flow of $133 million, reflecting an industry-leading free cash flow margin[5] - Net income for Q2 2025 was $150.2 million, a decrease of 37% sequentially from Q1 2025 and a 34% decrease year-over-year from Q2 2024[29] - Adjusted net income for Q2 2025 was $190.9 million, down 23% sequentially and 25% year-over-year[29] - Adjusted EBITDA for Q2 2025 was $594.2 million, an 8% decrease sequentially but a 3% increase year-over-year[29] - Revenues from oil and natural gas totaled $815.8 million in Q2 2025, down 10.34% from $909.9 million in Q1 2025 but up 5.06% from $776.3 million in Q2 2024[50] - Total revenues for the first half of 2025 were $1.909 billion, up 16.8% from $1.635 billion in the same period of 2024[58] Capital Expenditures and Investments - Matador's total capital expenditures for Q2 2025 were $402 million, with $345 million allocated to upstream and $56 million to midstream[9] - Capital expenditures for drilling, completing, and equipping in Q2 2025 were $345.3 million, 4% below the expected range[31] - Estimated capital expenditures for Q3 2025 are projected to be between $300 million and $370 million, a 3% decrease from Q2 2025[40] - The company reported a net cash used in investing activities of $1.007 billion for the first half of 2025, compared to $1.120 billion in the same period of 2024[59] Shareholder Returns and Equity - The company declared a quarterly base dividend of $0.3125 per share, representing an annualized yield of approximately 2.5%[13] - Matador repurchased 1.1 million shares at an average price of $40.37 per share, totaling $44 million under its $400 million share repurchase authorization[14] - Shareholders' equity increased to $5.73 billion as of June 30, 2025, compared to $5.46 billion as of December 31, 2024, representing a growth of 4.93%[57] Cost Management and Efficiency - Cash operating costs for Q2 2025 were $13.76 per BOE, a 13% reduction from Q1 2025 costs of $15.84 per BOE[10] - The company plans to continue evaluating its operated rig count to balance production growth with free cash flow generation for 2025 and beyond[7] - The company expects cash tax payments to decrease to a range of 0 to 5% of pre-tax book net income for 2025 due to the One Big Beautiful Bill Act[41] Debt and Liquidity - Matador's leverage ratio was less than 1.0x as of June 30, 2025, with liquidity exceeding $1.8 billion[11] - The company repaid $640 million under its Credit Agreement in Q2 2025, compared to $790 million in Q2 2024[59] - Cash and restricted cash at the end of Q2 2025 was $86.786 million, up from $63.903 million at the end of Q2 2024[59] San Mateo Midstream Performance - San Mateo Midstream increased processing capacity by 38% to 720 MMcf/d with the completion of the Marlan Plant expansion[5] - San Mateo's net income reached a record $66 million in Q2 2025, with an Adjusted EBITDA of $85.5 million, marking a 42% increase sequentially[33] - San Mateo's natural gas processing capacity increased to 720 MMcf per day, contributing to a 37% year-over-year increase in natural gas processing volumes[33] - San Mateo's adjusted free cash flow for Q2 2025 was $(14,935), compared to $(6,382) in Q1 2025 and $35,204 in Q2 2024[72]

Core Insights - The First Trust Energy AlphaDEX ETF (FXN) is a smart beta ETF that provides broad exposure to the Energy sector, having debuted on May 8, 2007 [1] - The ETF industry has been traditionally dominated by market capitalization weighted indexes, but smart beta strategies aim to outperform through stock selection based on fundamental characteristics [2][3] - FXN is sponsored by First Trust Advisors and has assets totaling approximately $278.76 million, positioning it as an average-sized ETF in the Energy category [5] Fund Structure and Strategy - FXN seeks to match the performance of the StrataQuant Energy Index, which is a modified equal-dollar weighted index designed to identify stocks from the Russell 1000 Index that may generate positive alpha [6] - The fund has an annual operating expense ratio of 0.61% and a 12-month trailing dividend yield of 2.92%, which is competitive within its peer group [7] Sector Exposure and Holdings - The fund has a significant allocation to the Energy sector, representing 93.5% of its portfolio [8] - First Solar, Inc. (FSLR) is the largest holding at approximately 5.8%, with the top 10 holdings accounting for about 41.17% of total assets [9] Performance Metrics - Year-to-date, FXN has experienced a loss of approximately -3.71%, and over the last 12 months, it is down about -14.12% as of July 18, 2025 [11] - The fund has a beta of 0.90 and a standard deviation of 28.29% over the trailing three-year period, indicating a higher risk profile compared to peers [11] Alternatives in the Market - For investors seeking to outperform the Energy ETFs segment, alternatives such as the Vanguard Energy ETF (VDE) and the Energy Select Sector SPDR ETF (XLE) are available, with VDE having $7.15 billion in assets and XLE at $27.57 billion [13] - VDE and XLE have lower expense ratios of 0.09% and 0.08% respectively, making them more attractive options for cost-conscious investors [13]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for Matador Resources despite higher revenues, with a focus on how actual results will compare to estimates [1][3]. Earnings Expectations - Matador is expected to report quarterly earnings of $1.30 per share, reflecting a year-over-year decrease of 36.6%, while revenues are projected to be $915.86 million, an increase of 8.1% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 4.91% higher in the last 30 days, indicating a positive reassessment by analysts [4]. Earnings Surprise Prediction - The Most Accurate Estimate for Matador is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +15.51%, suggesting a strong likelihood of beating the consensus EPS estimate [12]. Historical Performance - Matador has consistently beaten consensus EPS estimates, achieving a surprise of +14.37% in the last reported quarter and surpassing estimates in all of the last four quarters [13][14]. Additional Considerations - While an earnings beat can influence stock movement, other factors may also play a significant role in determining stock performance post-earnings release [15].

Core Viewpoint - Matador Resources (MTDR) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, continuing a strong trend of surpassing expectations in previous quarters [1][6]. Earnings Performance - Matador has consistently exceeded earnings estimates, with an average surprise of 9.77% over the last two quarters [2]. - In the most recent quarter, Matador reported earnings of $1.74 per share against an expectation of $1.99, resulting in a surprise of 14.37%. In the prior quarter, it reported $1.83 per share against an estimate of $1.74, yielding a surprise of 5.17% [3]. Earnings Estimates and Predictions - Recent estimates for Matador have been revised upward, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [6][9]. - The current Earnings ESP for Matador is +13.04%, suggesting analysts are optimistic about the company's earnings prospects [9]. Zacks Rank and Success Rate - Matador holds a Zacks Rank of 3 (Hold), which, when combined with a positive Earnings ESP, historically results in a positive surprise rate of nearly 70% [7][9]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions prior to earnings releases [8].

Group 1 - The core viewpoint is that despite market skepticism regarding the energy transition, Matador's Delaware oil production is expected to grow over 30% year-over-year in 2025, with management guiding for a record 40 new wells to be online this quarter [1] Group 2 - The company focuses on identifying mispriced opportunities in the financial and technology sectors, aiming to uncover asymmetric setups driven by market overreactions, business model shifts, or cyclical inflections [1]

Group 1 - As of June 13, 2025, two stocks in the energy sector are signaling potential warnings for momentum-focused investors [1] - The Relative Strength Index (RSI) is a key momentum indicator, with values above 70 indicating that a stock may be overbought [2] - Major overbought stocks in the energy sector include Matador Resources Co and TotalEnergies SE [3] Group 2 - Matador Resources promoted William Lambert to EVP, CFO, and Head of Strategy, with the stock rising approximately 9% over the past five days and a 52-week high of $66.89 [6] - Matador Resources has an RSI value of 70.8, with shares closing at $49.50, gaining 1% on Thursday [6] - TotalEnergies reported a first-quarter adjusted EPS of $1.83, down 15% year-over-year, and missed the consensus of $1.88 [6] - For Q2 FY25, TotalEnergies expects hydrocarbon production to increase by 2% to 3% year-over-year, impacted by planned maintenance [6] - The average LNG selling price for TotalEnergies is anticipated to be between $9 and $9.5/Mbtu in Q2 2025 [6] - TotalEnergies' stock gained around 7% over the past five days, with a 52-week high of $71.03 and an RSI value of 70.4, closing at $63.07 [6]

Financial Data and Key Metrics Changes - The company reported an increase in assets from $270,000 to over $11,000,000,000, indicating significant growth over the years [4][54]. - The company has achieved a steady increase in dividends, starting from $0.10 to $1.25, with plans to consider further increases based on cash flow and market conditions [60]. Business Line Data and Key Metrics Changes - The midstream processing capacity has expanded from 60 million cubic feet per day to 720 million cubic feet per day, showcasing substantial growth in operational capabilities [44][62]. - The company has added over 17,000 acres through smaller acquisitions in 2024, excluding larger deals, demonstrating active land acquisition strategies [35]. Market Data and Key Metrics Changes - The company ranks highly among peers in profit margins per barrel of oil produced, indicating strong operational efficiency [55][62]. - The company has maintained a high participation rate in its employee share purchase plan, which has grown to over 97%, reflecting strong employee engagement and alignment with company performance [59]. Company Strategy and Development Direction - The company focuses on profitable growth at a measured pace, emphasizing the importance of maintaining high returns on capital and a straightforward balance sheet [90][92]. - The strategy includes both small incremental acquisitions and larger strategic deals, with recent significant acquisitions enhancing the company's market position [61][92]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to sustain high returns and maintain a durable inventory of drilling locations for the next 10 to 15 years [92]. - The company is positioned to leverage free cash flow for dividends, acquisitions, and stock buybacks, indicating a proactive approach to capital management [94]. Other Important Information - The company has received a credit rating upgrade to double B from Fitch, one step away from investment grade, reflecting improved financial stability [93]. - The board of directors and management are aligned with shareholders, emphasizing their commitment to the company's success and performance [96]. Q&A Session Summary Question: What is the company's approach to acquisitions? - The company employs a strategy of both small incremental acquisitions and larger strategic deals, with recent significant acquisitions enhancing its market position [61][92]. Question: How does the company plan to manage its dividends? - The company plans to use free cash flow to support a fixed dividend that will continue to rise, alongside potential stock buybacks when prices are favorable [94]. Question: What is the outlook for the company's drilling inventory? - Management indicated that the company has a durable inventory of drilling locations that can sustain operations for the next 10 to 15 years, ensuring continued production and profitability [92].