Company Performance - Matador Resources (MTDR) reported quarterly earnings of $2.05 per share, exceeding the Zacks Consensus Estimate of $1.75 per share, and up from $1.42 per share a year ago [6] - The company achieved revenues of $847.14 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 3.75%, compared to $638.08 million in the same quarter last year [7] - Matador has consistently outperformed consensus revenue estimates for the last four quarters [7][11] Future Outlook - The current consensus EPS estimate for Matador for the upcoming quarter is $2.03 on revenues of $899.74 million, and for the current fiscal year, it is $7.96 on revenues of $3.51 billion [9] - The estimate revisions trend for Matador is favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [13] - The industry outlook is also positive, with the Oil and Gas - Exploration and Production - United States sector currently ranking in the top 26% of over 250 Zacks industries [14] Industry Context - Coterra Energy (CTRA), another company in the same industry, is expected to report revenues of $1.36 billion, reflecting a 14.8% increase from the previous year [10] - The overall performance of stocks in the oil and gas sector can be significantly influenced by the industry's outlook [14]

[Executive Summary & Full-Year 2024 Guidance Update](index=1&type=section&id=Executive%20Summary%20%26%20Guidance%20Update) Matador Resources Company updated its full-year 2024 production guidance and provided management commentary on record Q2 performance and the significant Ameredev acquisition [Full-Year 2024 Production Guidance Update](index=1&type=section&id=Full-Year%202024%20Guidance%20Update) Matador Resources Company raised its full-year 2024 total oil and natural gas equivalent, oil, and natural gas production guidance, reflecting confidence in future production capacity, but this guidance does not include production from the upcoming Ameredev acquisition | Production | Prior Full-Year 2024 Guidance Range | New Full-Year 2024 Guidance (1) Range | (2) Difference | |:---|:---|:---|:---| | Total, BOE per day | 153,000 to 159,000 | 158,500 to 163,500 | +3.2% | | Oil, Bbl per day | 91,000 to 95,000 | 93,500 to 96,500 | +2.2% | | Natural Gas, MMcf per day | 370.0 to 386.0 | 390.0 to 402.0 | +4.8% | - The new production guidance does not include any production from the Ameredev acquisition, which is expected to close by the end of the third quarter of 2024[15](index=15&type=chunk)[16](index=16&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Joseph Wm. Foran highlighted Q2 2024 as one of the most significant quarters in company history, achieving record production and significant cost savings, and announced the largest acquisition to date, Ameredev, expected to substantially increase the company's Delaware Basin assets and reserves - Matador achieved record production performance and significant cost savings in Q2 2024, and announced the **$1.905 billion acquisition of Ameredev**, expected to close by the end of Q3[5](index=5&type=chunk) - The Ameredev acquisition is expected to increase Matador's net acreage in the northern Delaware Basin to **191,900 acres** and total proved reserves to over **600 million BOE**[5](index=5&type=chunk) - The company successfully completed its first 'trimul-frac' completion, estimated to save approximately **$350,000 per well**, with plans for a second 'trimul-frac' and first 'remote trimul-frac' test in H2 2024[9](index=9&type=chunk) - Matador anticipates full-year 2024 drilling and completion costs to decrease to **$960 per completed lateral foot**, an **11% reduction** from 2023[9](index=9&type=chunk) - U-Turn wells drilled in 2023 exceeded expectations, with **five additional U-Turn wells** expected to be turned to sales in H2 2024, resulting in over **$15 million in total drilling cost savings**[21](index=21&type=chunk) [Pending Ameredev Acquisition](index=1&type=section&id=Pending%20Ameredev%20Acquisition) Matador announced the **$1.905 billion acquisition of Ameredev**, expected to close by the end of Q3 2024, significantly expanding its core Delaware Basin assets, including **33,500 net high-quality acres**, an estimated Q3 average production of **25,500 BOE per day**, over **117 million BOE in reserves**, and a **19% equity investment in Piñon Midstream** - Matador is acquiring Ameredev for **$1.905 billion**, expected to close by the end of Q3 2024, adding **33,500 net high-quality acres**[5](index=5&type=chunk)[6](index=6&type=chunk) - Ameredev is expected to average **25,500 BOE per day** in Q3, with over **117 million BOE in reserves** and **371 net high-quality drilling locations**[6](index=6&type=chunk) - The acquisition also includes an approximately **19% equity investment in Piñon Midstream**[6](index=6&type=chunk) - Matador plans to implement operational efficiencies such as 'simul-frac' and 'trimul-frac' on Ameredev assets post-acquisition[19](index=19&type=chunk) [Record Production and Wells Turned to Sales](index=2&type=section&id=Record%20Production%20and%20Wells%20Turned%20to%20Sales) In Q2 2024, Matador achieved a record average total production of **160,305 BOE per day**, exceeding expectations by **2%**, with oil production at **95,488 Bbl per day**, exceeding expectations by **3%**, driven by a record **47 (38.6 net) horizontal wells** turned to sales and strong performance from Dagger Lake South wells - In Q2 2024, Matador's average total production reached **160,305 BOE per day**, exceeding expectations by **2%**[24](index=24&type=chunk)[49](index=49&type=chunk) - Average oil production reached **95,488 Bbl per day**, exceeding expectations by **3%**[49](index=49&type=chunk) - Record production was partly attributed to **47 (38.6 net) horizontal wells** turned to sales in Q2, the most in company history[49](index=49&type=chunk) - The Dagger Lake South wells (part of the Advance acquisition) averaged **1,728 BOE per day** (83% oil) in 24-hour initial test production, exceeding expectations[49](index=49&type=chunk) [Continued Operational Efficiencies and Teamwork](index=3&type=section&id=Continued%20Operational%20Efficiencies%20and%20Teamwork) Matador achieved lower-than-expected costs in Q2 2024, with D/C/E capital expenditure savings of approximately **$25.5 million**, including **$10 million from operational efficiencies**, successfully implementing its first 'trimul-frac' completion, and anticipating **$15 million in total savings** from five U-Turn wells in H2 2024 - Q2 2024 D/C/E capital expenditures were **$314.5 million**, **$25.5 million (8%) below expectations**, with **$10 million** from operational efficiencies and cost savings[50](index=50&type=chunk) - The operations team set **20 drilling records** in Q2, with estimated savings of **$6 million**, accumulating approximately **$50 million** since the MaxCom Operations Center's inception in 2018[50](index=50&type=chunk) - The company successfully completed its first 'trimul-frac' completion, estimated to save approximately **$350,000 per well**, with plans for continued implementation in H2 2024[9](index=9&type=chunk) - Drilling of U-Turn wells is expected to result in **five wells** turned to sales in H2 2024, with total cost savings of **$15 million**[21](index=21&type=chunk) [40th Annual Meeting and Looking Ahead](index=3&type=section&id=40th%20Annual%20Meeting%20and%20Looking%20Ahead) Matador successfully held its 40th Annual Meeting of Shareholders on June 13, 2024, with all proposals passing with nearly **90% or higher support**, and management remains optimistic about drilling and acquisition opportunities in H2 2024 and beyond - Matador held its 40th Annual Meeting of Shareholders on June 13, 2024, with all proposals passing with nearly **90% or higher support**[22](index=22&type=chunk) - Company management is optimistic about drilling and acquisition opportunities in H2 2024 and 2025[22](index=22&type=chunk) [Second Quarter 2024 Operational and Financial Highlights](index=4&type=section&id=Second%20Quarter%202024%20Operational%20and%20Financial%20Highlights) Matador achieved strong operational and financial results in Q2 2024, including record average production, robust cash flow, and significant net income, with capital expenditures below expectations [Matador Operational and Financial Highlights](index=4&type=section&id=Matador%20Operational%20and%20Financial%20Highlights) Matador achieved strong operational and financial results in Q2 2024, including record average production, robust cash flow from operations and adjusted free cash flow, and significant net income and adjusted EBITDA, with both D/C/E and midstream capital expenditures below expectations | Metric | Amount (Millions USD) | |:---|:---| | Average Production (BOE per day) | 160,305 | | Net Cash Provided by Operating Activities | 592.9 | | Adjusted Free Cash Flow | 167.0 | | Net Income | 228.8 | | Adjusted Net Income | 255.9 | | Adjusted EBITDA | 578.1 | | San Mateo Net Income | 38.3 | | San Mateo Adjusted EBITDA | 58.0 | | D/C/E Capital Expenditures | 314.5 | | Midstream Capital Expenditures | 45.3 | - Diluted earnings per share were **$1.83**, and adjusted diluted earnings per share were **$2.05**[52](index=52&type=chunk) [Production Performance](index=4&type=section&id=Production%20Performance) In Q2 2024, Matador's total oil and gas production averaged **160,305 BOE per day**, up **7% sequentially** and **23% year-over-year**, exceeding company guidance by **2%**, with oil production averaging **95,488 Bbl per day**, up **13% sequentially** and **25% year-over-year**, exceeding guidance by **3%** | Production | Q2 2024 Average Daily Volume | Q2 2024 Guidance Range (1) | Difference (2) | Sequential (3) | YoY (4) | |:---|:---|:---|:---|:---|:---| | Total, BOE per day | 160,305 | 156,500 to 158,000 | +2% Better than Guidance | +7% | +23% | | Oil, Bbl per day | 95,488 | 92,500 to 93,500 | +3% Better than Guidance | +13% | +25% | | Natural Gas, MMcf per day | 388.9 | 384.0 to 387.0 | +1% Better than Guidance | Flat | +19% | - Total oil and gas production increased **7% sequentially** and **23% year-over-year**, primarily due to the 2023 Advance acquisition and increased production from new wells in existing and undeveloped areas[24](index=24&type=chunk) [Realized Commodity Prices](index=5&type=section&id=Realized%20Commodity%20Prices) In Q2 2024, Matador's realized oil price increased **5% sequentially** to **$81.20 per Bbl** and **11% year-over-year**, while realized natural gas price decreased **32% sequentially** to **$2.00 per Mcf** and **23% year-over-year** | Realized Commodity Prices | Sequential Q2 2024 | (Q2 2024 vs. Q1 2024) Sequential (1) Change | YoY Q2 2024 | (Q2 2024 vs. Q2 2023) (2) YoY Change | |:---|:---|:---|:---|:---| | Oil Prices, per Bbl | $81.20 | +5% | $81.20 | +11% | | Natural Gas Prices, per Mcf | $2.00 | -32% | $2.00 | -23% | [Operating Expenses](index=5&type=section&id=Operating%20Expenses) In Q2 2024, Matador's G&A expenses decreased **12% sequentially** to a record low of **$1.91 per BOE**, driven by increased production and lower cash-settled stock award values, while LOE decreased **3% sequentially** to **$5.42 per BOE**, consistent with full-year expectations - G&A expenses decreased **12% sequentially** to a record low of **$1.91 per BOE**, partly due to increased production and lower cash-settled stock award values[26](index=26&type=chunk) - LOE decreased **3% sequentially** to **$5.42 per BOE**, consistent with the company's full-year 2024 guidance range of **$5.25 to $5.75 per BOE**[55](index=55&type=chunk) - Matador expects full-year 2024 G&A expenses to be at the midpoint to low end of its prior guidance range of **$2.00 to $2.50 per BOE**[26](index=26&type=chunk) [Capital Expenditures](index=5&type=section&id=Capital%20Expenditures) In Q2 2024, Matador's D/C/E capital expenditures were **$314.5 million**, approximately **$25 million below expectations**, with **$10 million** in actual cost savings, and midstream capital expenditures were **$45.3 million**, below the **$60 million** estimate, primarily due to the timing of the Pronto midstream project | Q2 2024 Capital Expenditures (Millions USD) | Actual | (1) Guidance | (2) Difference vs. Guidance | |:---|:---|:---|:---| | D/C/E | $314.5 | $340.0 | -8% | | Midstream | $45.3 | $60.0 | -25% | - D/C/E capital expenditures were approximately **$25 million below expectations**, with about **$10 million** in actual cost savings[27](index=27&type=chunk) - Midstream capital expenditures were approximately **$15 million below expectations**, primarily due to the timing of the Pronto midstream project[27](index=27&type=chunk) [Midstream Update (San Mateo)](index=6&type=section&id=Midstream%20Update%20(San%20Mateo)) San Mateo exceeded expectations in Q2 2024 with **$38.3 million in net income** and **$58.0 million in adjusted EBITDA**, driven by increased third-party throughput, despite natural gas gathering volumes decreasing **8% sequentially** but increasing **19% year-over-year** - San Mateo achieved **$38.3 million in net income** and **$58.0 million in adjusted EBITDA** in Q2 2024, both exceeding expectations[29](index=29&type=chunk) | San Mateo Throughput Volumes | Sequential Q2 2024 | (Q2 2024 vs. Q1 2024) (1) Change | YoY Q2 2024 | (Q2 2024 vs. Q2 2023) (2) YoY Change | |:---|:---|:---|:---|:---| | Natural gas gathering, MMcf per day | 393 | -8% | 393 | +19% | | Natural gas processing, MMcf per day | 355 | -11% | 355 | -5% | | Oil gathering and transportation, Bbl per day | 46,300 | -5% | 46,300 | +12% | | Produced water handling, Bbl per day | 429,800 | -1% | 429,800 | +28% | [Third Quarter 2024 Estimates](index=6&type=section&id=Third%20Quarter%202024%20Estimates) Matador provides its Q3 2024 estimates for production growth, wells turned to sales, capital expenditures, and cash taxes, excluding the Ameredev acquisition [Estimated Production Growth](index=6&type=section&id=Estimated%20Production%20Growth) Matador expects average daily BOE production in Q3 2024 to increase **2% sequentially** from **160,305 BOE per day** in Q2 to approximately **164,000 BOE per day**, with oil production estimated between **96,500 to 97,500 Bbl per day** and natural gas production between **399.0 to 405.0 MMcf per day** | Period | Average Daily Total Production, BOE per day | Q2 and Q3 2024 Production Average Daily Oil Production, Bbl per day | Comparison Average Daily Natural Gas Production, MMcf per day | % Oil | |:---|:---|:---|:---|:---| | Q2 2024 | 160,305 | 95,488 | 388.9 | 60% | | Q3 2024E | 163,000 to 165,000 | 96,500 to 97,500 | 399.0 to 405.0 | 59% | - Average daily BOE production is expected to increase **2% sequentially** in Q3 to approximately **164,000 BOE per day**[58](index=58&type=chunk) [Estimated Wells Turned to Sales](index=6&type=section&id=Estimated%20Wells%20Turned%20to%20Sales) Matador anticipates turning **32 gross (26.5 net) operated horizontal wells** to sales in the Delaware Basin during Q3 2024, across its Antelope Ridge, Arrowhead, Ranger, and Rustler Breaks asset areas - Matador expects to turn **32 gross (26.5 net) operated horizontal wells** to sales in the Delaware Basin in Q3 2024[31](index=31&type=chunk) [Estimated Capital Expenditures](index=7&type=section&id=Estimated%20Capital%20Expenditures) Matador estimates Q3 2024 D/C/E capital expenditures to be approximately **$330 million to $370 million**, an **11% sequential increase**, and midstream capital expenditures to be approximately **$45 million to $65 million**, a **21% sequential increase**, primarily due to the timing of the Pronto project, excluding Ameredev assets - Matador estimates Q3 2024 D/C/E capital expenditures to be approximately **$330 million to $370 million**, an **11% sequential increase**[61](index=61&type=chunk) - Full-year 2024 D/C/E capital expenditures are expected to be at the midpoint to high end of the prior guidance range of **$1.10 billion to $1.30 billion**[61](index=61&type=chunk) - Q3 midstream capital expenditures are estimated at approximately **$45 million to $65 million**, a **21% sequential increase**, primarily due to the timing of the Pronto project[61](index=61&type=chunk) - These capital expenditure estimates do not include capital expenditures associated with Ameredev assets[61](index=61&type=chunk) [Estimated Cash Taxes](index=7&type=section&id=Estimated%20Cash%20Taxes) Matador anticipates full-year 2024 cash tax payments to be approximately **5% to 10% of book net income before taxes**, with actual payments subject to commodity prices, weather, tax deductions, legislative changes, the Ameredev transaction, and other acquisitions - Matador expects full-year 2024 cash tax payments to be approximately **5% to 10% of book net income before taxes**[62](index=62&type=chunk) - Cash tax payments will be influenced by commodity prices, weather, tax deductions, legislative changes, the Ameredev transaction, and other acquisitions[62](index=62&type=chunk) [Company Information & Forward-Looking Statements](index=7&type=section&id=Company%20Information%20%26%20Forward-Looking%20Statements) This section provides details on Matador's conference call, company overview, forward-looking statements, and investor contact information [Conference Call Information](index=7&type=section&id=Conference%20Call%20Information) Matador will host a conference call on Wednesday, July 24, 2024, at 10:00 AM CT to review Q2 2024 operational and financial results, accessible via the company website or a dedicated link, with a replay available for one year - The conference call will be held on Wednesday, July 24, 2024, at **10:00 AM CT**[63](index=63&type=chunk) - Live and replay access is available via the 'Events and Presentations' page on the company's website, www.matadorresources.com[34](index=34&type=chunk)[63](index=63&type=chunk) [About Matador Resources Company](index=7&type=section&id=About%20Matador%20Resources%20Company) Matador is an independent energy company engaged in the exploration, development, production, and acquisition of oil and natural gas resources in the U.S., primarily focusing on the Wolfcamp and Bone Spring shales in the Delaware Basin, with additional operations in the Eagle Ford and Haynesville shales, and Cotton Valley plays - Matador is an independent energy company focused on the exploration, development, production, and acquisition of oil and natural gas resources in the U.S[35](index=35&type=chunk) - Primary operations are concentrated in the Wolfcamp and Bone Spring shales of the Delaware Basin, with additional operations in the Eagle Ford, Haynesville, and Cotton Valley plays[35](index=35&type=chunk) - The company also provides midstream services, including natural gas processing, oil transportation, oil and natural gas and produced water gathering, and produced water disposal services[35](index=35&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements regarding future events and business performance, including the completion and timing of the Ameredev acquisition, anticipated benefits, production guidance, and future liquidity, which are based on current expectations but may differ materially due to various risks and uncertainties - Forward-looking statements cover the completion and timing of the Ameredev acquisition, anticipated benefits, production guidance, future liquidity, dividend payments, and regulatory actions[37](index=37&type=chunk) - Actual results and future events may differ materially due to various risks and uncertainties, including the ability to complete acquisitions, commodity prices, ability to execute business plans, reserve replacement, operating costs, and regulatory approvals[37](index=37&type=chunk) - The company undertakes no obligation to update these forward-looking statements, and investors should not place undue reliance on them[37](index=37&type=chunk) [Contact Information](index=8&type=section&id=Contact%20Information) Investor Relations contact: Mac Schmitz, Senior Vice President - Investor Relations, Phone: (972) 371-5225, Email: investors@matadorresources.com - Investor Relations contact: Mac Schmitz, Senior Vice President - Investor Relations[38](index=38&type=chunk) - Contact phone: **(972) 371-5225**, email: investors@matadorresources.com[38](index=38&type=chunk) [Selected Financial and Operating Items](index=9&type=section&id=Selected%20Financial%20and%20Operating%20Items) This section presents Matador Resources Company's key financial and operating metrics for Q2 2024, Q1 2024, and Q2 2023, including production, prices, revenues, expenses, and cash flows [Key Financial and Operating Metrics](index=9&type=section&id=Key%20Financial%20and%20Operating%20Metrics) This section provides selected financial and operating metrics for Matador Resources Company for Q2 2024, Q1 2024, and Q2 2023, covering net production, average daily production, average realized prices, revenues, operating expenses, and key financial data | Metric | Three Months Ended June 30, 2024 | Three Months Ended March 31, 2024 | Three Months Ended June 30, 2023 | |:---|:---|:---|:---| | **Net Production:** | | | | | Oil (MBbl) | 8,689 | 7,715 | 6,947 | | Natural Gas (Bcf) | 35.4 | 35.5 | 29.7 | | Total Oil Equivalent (MBOE) | 14,588 | 13,628 | 11,892 | | **Average Daily Production:** | | | | | Oil (Bbl/d) | 95,488 | 84,777 | 76,345 | | Natural Gas (MMcf/d) | 388.9 | 389.9 | 326.0 | | Total Oil Equivalent (BOE/d) | 160,305 | 149,760 | 130,683 | | **Average Realized Prices:** | | | | | Oil (Excluding Derivatives) (per Bbl) | $81.20 | $77.58 | $73.46 | | Natural Gas (Excluding Derivatives) (per Mcf) | $2.00 | $2.96 | $2.61 | | **Revenue (Millions USD):** | | | | | Oil and Natural Gas Revenue | $776.3 | $703.5 | $587.9 | | Third-Party Midstream Services Revenue | $32.7 | $32.4 | $30.1 | | **Operating Expenses (per BOE):** | | | | | Production Taxes, Transportation and Processing | $5.27 | $5.15 | $5.21 | | Lease Operating | $5.42 | $5.60 | $5.13 | | General and Administrative | $1.91 | $2.18 | $2.25 | | **Other (Millions USD):** | | | | | Net Income | $228.8 | $193.7 | $164.7 | | Diluted Earnings Per Share | $1.83 | $1.61 | $1.37 | | Adjusted Net Income | $255.9 | $206.2 | $170.1 | | Adjusted Diluted Earnings Per Share | $2.05 | $1.71 | $1.42 | | Adjusted EBITDA | $578.1 | $505.4 | $423.3 | | Net Cash Provided by Operating Activities | $592.9 | $468.6 | $449.0 | | Adjusted Free Cash Flow | $167.0 | $28.6 | $77.7 | | D/C/E Capital Expenditures | $314.5 | $350.7 | $309.6 | | Midstream Capital Expenditures | $45.3 | $79.3 | $11.7 | [Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Matador's unaudited condensed consolidated financial statements, including balance sheets, statements of income, and statements of cash flows [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2024, Matador's total assets increased to **$8.518 billion** from **$7.727 billion** on December 31, 2023, with a slight decrease in total liabilities and a significant increase in total stockholders' equity, reflecting an expanded asset base and improved financial position | Metric (Thousands USD) | June 30, 2024 | December 31, 2023 | |:---|:---|:---| | **Assets:** | | | | Total Current Assets | 738,440 | 715,872 | | Property and Equipment, Net | 7,677,788 | 6,956,441 | | Total Assets | 8,518,391 | 7,726,996 | | **Liabilities and Stockholders' Equity:** | | | | Total Current Liabilities | 856,541 | 685,275 | | Total Long-Term Liabilities | 2,806,245 | 2,914,033 | | Total Matador Resources Company Stockholders' Equity | 4,631,626 | 3,910,862 | | Noncontrolling Interests | 223,979 | 216,826 | | Total Stockholders' Equity | 4,855,605 | 4,127,688 | | Total Liabilities and Stockholders' Equity | 8,518,391 | 7,726,996 | [Condensed Consolidated Statements of Income](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) In Q2 2024, Matador's total revenue significantly increased to **$847.1 million** from **$638.1 million** in the prior year, with growth in both oil and natural gas revenue and third-party midstream services revenue, resulting in **$228.8 million in net income** and **$1.83 diluted earnings per share** | Metric (Thousands USD) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | |:---|:---|:---| | Oil and Natural Gas Revenue | 776,279 | 587,917 | | Third-Party Midstream Services Revenue | 32,651 | 30,075 | | Sales of Purchased Natural Gas | 46,265 | 31,898 | | Gain (Loss) on Realized Derivatives | 3,770 | (3,148) | | Loss on Unrealized Derivatives | (11,829) | (8,659) | | **Total Revenue** | **847,136** | **638,083** | | **Total Expenses** | **483,516** | **385,815** | | **Operating Income** | **363,620** | **252,268** | | **Income Tax Expense** | **77,986** | **57,306** | | **Net Income Attributable to Matador Resources Company Stockholders** | **228,769** | **164,666** | | **Diluted Earnings Per Share** | **1.83** | **1.37** | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q2 2024, Matador's net cash provided by operating activities was **$592.9 million**, up from **$449.0 million** in the prior year, with cash outflows for investing activities primarily driven by D/C/E capital expenditures and acquisitions, and financing activities influenced by credit agreement borrowings and repayments | Metric (Thousands USD) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | |:---|:---|:---| | **Net Cash Provided by Operating Activities** | **592,927** | **449,011** | | **Net Cash Used in Investing Activities:** | | | | Drilling, Completion and Equipment Capital Expenditures | (375,076) | (315,367) | | Ameredev Acquisition | (95,250) | — | | Oil and Natural Gas Asset Acquisitions | (53,846) | (32,034) | | Midstream Capital Expenditures | (52,115) | (18,730) | | **Total Net Cash Used in Investing Activities** | **(576,832)** | **(1,895,267)** | | **Net Cash Used in Financing Activities** | **(26,518)** | **1,008,666** | | **Change in Cash and Restricted Cash** | **(10,423)** | **(437,590)** | | **Cash and Restricted Cash at End of Period** | **63,903** | **65,838** | [Supplemental Non-GAAP Financial Measures](index=14&type=section&id=Supplemental%20Non-GAAP%20Financial%20Measures) This section provides reconciliations and definitions for Matador's non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings Per Diluted Common Share, and Adjusted Free Cash Flow [Adjusted EBITDA](index=14&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA is a non-GAAP financial measure used to assess operational performance, excluding interest expense, income taxes, depreciation, amortization, accretion of asset retirement obligations, impairment of assets, unrealized derivative gains/losses, non-recurring transaction costs, non-cash equity compensation, and gains/losses on asset sales and impairments - Adjusted EBITDA is a non-GAAP financial measure used to assess operational performance, excluding the impact of financing methods or capital structure[44](index=44&type=chunk)[86](index=86&type=chunk) - Defined as earnings before interest expense, income taxes, depreciation, amortization, accretion of asset retirement obligations, impairment of assets, unrealized derivative gains/losses, non-recurring transaction costs, non-cash equity compensation expense, and gains/losses on asset sales and impairments[44](index=44&type=chunk) [Adjusted EBITDA – Matador Resources Company](index=14&type=section&id=Adjusted%20EBITDA%20%E2%80%93%20Matador%20Resources%20Company) In Q2 2024, Matador Resources Company's adjusted EBITDA attributable to stockholders was **$578.1 million**, a significant increase from **$505.4 million** in the prior quarter and **$423.3 million** in the prior year, reflecting enhanced core business profitability | Metric (Thousands USD) | June 30, 2024 | March 31, 2024 | June 30, 2023 | |:---|:---|:---|:---| | Net Income Attributable to Matador Resources Company Stockholders | 228,769 | 193,729 | 164,666 | | Net Income | 247,527 | 213,190 | 177,095 | | Interest Expense | 35,986 | 39,562 | 34,229 | | Total Income Tax Expense | 77,986 | 66,778 | 57,306 | | Depreciation, Amortization and Depletion | 225,934 | 212,311 | 177,514 | | Accretion of Asset Retirement Obligations | 1,329 | 1,273 | 792 | | Unrealized Derivative Loss (Gain) | 11,829 | (2,075) | 8,659 | | Non-Cash Equity Compensation Expense | 2,974 | 2,838 | 3,931 | | Consolidated Adjusted EBITDA | 606,498 | 533,877 | 444,151 | | Adjusted EBITDA Attributable to Noncontrolling Interests | (28,425) | (28,507) | (20,900) | | **Adjusted EBITDA Attributable to Matador Resources Company Stockholders** | **578,073** | **505,370** | **423,251** | | Metric (Thousands USD) | June 30, 2024 | March 31, 2024 | June 30, 2023 | |:---|:---|:---|:---| | Net Cash Provided by Operating Activities | 592,927 | 468,562 | 449,011 | | Net Change in Operating Assets and Liabilities | (50,841) | 12,792 | (32,410) | | Interest Expense, Net of Non-Cash Portion | 31,044 | 34,918 | 32,172 | | Current Income Tax Expense (Benefit) | 30,104 | 17,272 | (4,929) | | Other Non-Cash and Non-Recurring Expenses | 3,264 | 333 | 307 | | Adjusted EBITDA Attributable to Noncontrolling Interests | (28,425) | (28,507) | (20,900) | | **Adjusted EBITDA Attributable to Matador Resources Company Stockholders** | **578,073** | **505,370** | **423,251** | [Adjusted EBITDA – San Mateo (100%)](index=15&type=section&id=Adjusted%20EBITDA%20%E2%80%93%20San%20Mateo%20(100%)) San Mateo achieved **$58.01 million in adjusted EBITDA** in Q2 2024, slightly below **$58.18 million** in the prior quarter but significantly higher than **$42.65 million** in the prior year, demonstrating continued strong performance in its midstream operations | Metric (Thousands USD) | June 30, 2024 | March 31, 2024 | June 30, 2023 | |:---|:---|:---|:---| | Net Income | 38,285 | 39,718 | 25,365 | | Depreciation, Amortization and Depletion | 9,237 | 9,170 | 8,675 | | Interest Expense | 9,189 | 9,193 | 8,533 | | Accretion of Asset Retirement Obligations | 99 | 97 | 80 | | Non-Recurring Expenses | 1,200 | — | — | | **Adjusted EBITDA** | **58,010** | **58,178** | **42,653** | | Metric (Thousands USD) | June 30, 2024 | March 31, 2024 | June 30, 2023 | |:---|:---|:---|:---| | Net Cash Provided by Operating Activities | 48,052 | 54,005 | 17,326 | | Net Change in Operating Assets and Liabilities | (154) | (4,746) | 17,043 | | Interest Expense, Net of Non-Cash Portion | 8,912 | 8,919 | 8,284 | | Non-Recurring Expenses | 1,200 | — | — | | **Adjusted EBITDA** | **58,010** | **58,178** | **42,653** | [Adjusted Net Income and Adjusted Earnings Per Diluted Common Share](index=16&type=section&id=Adjusted%20Net%20Income%20and%20Adjusted%20Earnings%20Per%20Diluted%20Common%20Share) Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that provide a more relevant comparison of company performance by adjusting for items such as unrealized derivative gains/losses, asset impairment charges, and non-recurring transaction costs - Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures that provide a more relevant comparison of performance by adjusting for unrealized derivative gains/losses, asset impairment charges, and non-recurring transaction costs[89](index=89&type=chunk) | Metric (Thousands USD, except per share data) | June 30, 2024 | March 31, 2024 | June 30, 2023 | |:---|:---|:---|:---| | Net Income Attributable to Matador Resources Company Stockholders | 228,769 | 193,729 | 164,666 | | Adjusted Net Income Attributable to Matador Resources Company Stockholders (Non-GAAP) | 255,915 | 206,199 | 170,052 | | Weighted Average Common Shares Outstanding - Diluted | 124,896 | 120,253 | 119,842 | | Adjusted Earnings Per Diluted Common Share Attributable to Matador Resources Company Stockholders (Non-GAAP) - Diluted | $2.05 | $1.71 | $1.42 | [Adjusted Free Cash Flow](index=16&type=section&id=Adjusted%20Free%20Cash%20Flow) Adjusted free cash flow is a non-GAAP financial measure that assesses the company's ability to manage operating cash flow, internally fund capital expenditures, pay dividends, and repay debt, calculated by adjusting net cash provided by operating activities for working capital changes, noncontrolling interest cash flows, and capital accruals - Adjusted free cash flow is a non-GAAP financial measure that assesses the company's ability to manage operating cash flow, internally fund capital expenditures, pay dividends, and repay debt[91](index=91&type=chunk) - This metric is calculated by adjusting net cash provided by operating activities for changes in working capital, noncontrolling interest cash flows, and capital accruals within capital expenditures[90](index=90&type=chunk) [Adjusted Free Cash Flow - Matador Resources Company](index=17&type=section&id=Adjusted%20Free%20Cash%20Flow%20-%20Matador%20Resources%20Company) In Q2 2024, Matador Resources Company's adjusted free cash flow was **$167.0 million**, a substantial increase from **$28.6 million** in the prior quarter and **$77.7 million** in the prior year, demonstrating strong cash generation capabilities | Metric (Thousands USD) | June 30, 2024 | March 31, 2024 | June 30, 2023 | |:---|:---|:---|:---| | Net Cash Provided by Operating Activities | 592,927 | 468,562 | 449,011 | | Net Change in Operating Assets and Liabilities | (50,841) | 12,792 | (32,410) | | San Mateo Distributable Cash Flow Attributable to Noncontrolling Interests | (23,470) | (24,137) | (16,841) | | Total Distributable Cash Flow | 527,366 | 458,717 | 399,760 | | Drilling, Completion and Equipment Capital Expenditures | 375,076 | 236,639 | 315,367 | | Midstream Capital Expenditures | 52,115 | 105,086 | 18,730 | | Net Change in Capital Accruals | (61,168) | 95,342 | (5,985) | | San Mateo Accrued Capital Expenditures Attributable to Noncontrolling Interests | (6,220) | (7,138) | (6,752) | | Total Accrued Capital Expenditures | 360,348 | 430,155 | 322,069 | | **Adjusted Free Cash Flow** | **167,018** | **28,562** | **77,691** | [Adjusted Free Cash Flow - San Mateo (100%)](index=17&type=section&id=Adjusted%20Free%20Cash%20Flow%20-%20San%20Mateo%20(100%)) In Q2 2024, San Mateo's adjusted free cash flow was **$35.2 million**, slightly above **$34.7 million** in the prior quarter and significantly higher than **$20.6 million** in the prior year, indicating healthy cash flow from its midstream operations | Metric (Thousands USD) | June 30, 2024 | March 31, 2024 | June 30, 2023 | |:---|:---|:---|:---| | San Mateo Net Cash Provided by Operating Activities | 48,052 | 54,005 | 17,326 | | San Mateo Net Change in Operating Assets and Liabilities | (154) | (4,746) | 17,043 | | Total San Mateo Distributable Cash Flow | 47,898 | 49,259 | 34,369 | | San Mateo Capital Expenditures | 11,215 | 23,211 | 12,006 | | San Mateo Net Change in Capital Accruals | 1,479 | (8,644) | 1,774 | | San Mateo Accrued Capital Expenditures | 12,694 | 14,567 | 13,780 | | **San Mateo Adjusted Free Cash Flow** | **35,204** | **34,692** | **20,589** |

Core Viewpoint - The article emphasizes the importance of value investing and highlights specific stocks, particularly Matador Resources (MTDR) and SM Energy (SM), which are currently considered undervalued based on various financial metrics [2][8]. Company Analysis: Matador Resources (MTDR) - MTDR has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for investment [4]. - The stock's P/E ratio is 7.10, significantly lower than the industry average of 10.32, suggesting it may be undervalued [4]. - MTDR's Forward P/E has fluctuated between 5.63 and 9.96 over the past 52 weeks, with a median of 7.53 [4]. - The P/B ratio for MTDR is 1.66, compared to the industry average of 2.48, further indicating its attractiveness [5]. - Over the past year, MTDR's P/B ratio has ranged from 1.50 to 2.13, with a median of 1.77 [5]. - MTDR's P/CF ratio stands at 4.39, which is lower than the industry's average of 7.83, reinforcing its undervalued status [6]. - The P/CF ratio has varied between 3.97 and 5.42 over the past year, with a median of 4.63 [6]. Company Analysis: SM Energy (SM) - SM is rated as a 1 (Strong Buy) stock with an A grade for Value, indicating strong investment potential [7]. - The P/B ratio for SM is 1.40, which is also lower than the industry average of 2.48, suggesting it is undervalued [7]. - Over the past year, SM's P/B ratio has fluctuated between 1.14 and 1.64, with a median of 1.40 [7]. Conclusion - Both Matador Resources and SM Energy are highlighted as strong value stocks, likely undervalued based on their earnings outlook and key financial metrics [8].

Matador Resources (MTDR) closed the last trading session at $61.65, gaining 8% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $79.58 indicates a 29.1% upside potential. The mean estimate comprises 12 short-term price targets with a standard deviation of $7.22. While the lowest estimate of $62 indicates a 0.6% increase from the current price level, the most optimistic analyst expec ...

Company Performance - Matador Resources (MTDR) has returned 5.7% year-to-date, outperforming the average gain of 5% in the Oils-Energy sector [4] - The Zacks Consensus Estimate for MTDR's full-year earnings has increased by 10.7% over the past three months, indicating improved analyst sentiment [4] - Matador Resources holds a Zacks Rank of 2 (Buy), suggesting it is poised to outperform the broader market in the near term [3] Industry Context - Matador Resources is part of the Oil and Gas - Exploration and Production - United States industry, which consists of 36 individual stocks and currently ranks 154 in the Zacks Industry Rank [6] - The Oil and Gas - Exploration and Production - United States industry has gained an average of 5.5% year-to-date, indicating that Matador Resources is performing better than its industry peers [6] - Another notable stock in the Oils-Energy sector is Plains All American Pipeline (PAA), which has increased by 22.4% year-to-date and also holds a Zacks Rank of 2 (Buy) [5][7]

Core Viewpoint - Matador Resources (MTDR) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][4][10] Earnings Estimate Revisions - Analysts have increased their earnings estimates for Matador by 16.1% over the past three months, indicating a positive outlook for the company's performance [6][13] - The Zacks rating system effectively tracks changes in earnings estimates, which correlates strongly with near-term stock price movements [5][11] Zacks Rating System - The Zacks rating system maintains a balanced approach with an equal proportion of 'buy' and 'sell' ratings across over 4000 stocks, with only the top 5% receiving a 'Strong Buy' rating [7][12] - The upgrade of Matador to a Zacks Rank 1 places it in the top 5% of stocks based on earnings estimate revisions, suggesting potential for price appreciation [8][10] Future Earnings Potential - For the fiscal year ending December 2024, Matador is expected to earn $7.89 per share, reflecting a 16.5% increase from the previous year [13]

Group 1 - Matador Resources Company (MTDR) is a leading upstream player with a strong presence in oil and natural gas shale, expecting earnings growth of 16.5% in 2024 and 18.6% in 2025 [1] - The price of West Texas Intermediate crude has reached $80 per barrel, which is favorable for exploration and production activities, likely aiding MTDR in increasing production volumes [2] - Matador Resources has entered into a $1.91 billion agreement to expand its operations in the Delaware Basin, projected to close in late Q3 2024, with an expected production exceeding 180,000 barrels of oil equivalent per day [3] Group 2 - The combination of high commodity prices and expectations for increased production is anticipated to positively impact Matador Resources' bottom line [4] - Other top-ranked energy companies include Vitesse Energy Inc, ProPetro Holding Corp, and Vista Energy SAB de CV, with Vitesse Energy holding a Zacks Rank 1 and the others ranked 2 [6] - Vitesse Energy has interests in 6,932 productive wells in the Bakken region, ensuring a solid production outlook if crude prices remain favorable [7]

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks across various market conditions, focusing on traditional valuation metrics to uncover undervalued stocks with profit potential [1] Valuation Metrics - Matador Resources (MTDR) has a Price-to-Book (P/B) ratio of 1.54, which is lower than the industry average of 2.34, indicating potential undervaluation [2] - MTDR's P/B ratio has fluctuated between a high of 2.13 and a low of 1.53 over the past 12 months, with a median of 1.77 [2] - The company also has a Price-to-Cash Flow (P/CF) ratio of 4.06, significantly lower than the industry average of 7.37, suggesting it may be undervalued based on cash flow [6] - MTDR's P/CF ratio has ranged from a high of 5.42 to a low of 3.50 in the past year, with a median of 4.63 [6] - The Forward Price-to-Earnings (P/E) ratio for MTDR is 7.17, compared to the industry average of 9.97, further indicating potential undervaluation [7] - Over the past year, MTDR's Forward P/E has varied from a high of 9.96 to a low of 5.63, with a median of 7.53 [7] Investment Grade - Matador Resources currently holds a Zacks Rank of 2 (Buy) and an A rating for Value, highlighting its attractiveness as a value stock [7] - The strong Value grade for MTDR is supported by its favorable earnings outlook, reinforcing the notion that it is likely undervalued at present [3]

Upon completion, Matador's pro forma holdings will exceed 190,000 net acres in the Delaware Basin, boosting production to more than 180,000 barrels of oil and natural gas equivalent (BOE) per day and increasing proved reserves to over 580 million BOE. According to the company, the deal is expected to generate forward one-year Adjusted EBITDA of approximately $425-$475 million, offering a favorable purchase price multiple of 4.2x for the upstream assets. Mr. Foran expressed confidence in the acquisition's ab ...

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