Matador Resources(MTDR)2025-02-25 21:41Financial Performance - The company generated free cash flow in all four quarters of 2024[32]. - The quarterly cash dividend was increased from $0.20 to $0.25 per share in Q4 2024[32]. - A special distribution of approximately $219.8 million was received from San Mateo due to the Pronto Transaction[33]. - The company earned $108.2 million in performance incentives through September 30, 2024, related to the San Mateo II joint venture[80]. - The company has the potential to earn up to $75.0 million in incentive payments from Five Point over a five-year period following the Pronto Transaction[83]. - Total oil equivalent production for the year ended December 31, 2024, was approximately 62.5 million BOE, a 30% increase from 48.1 million BOE in 2023[115]. - Average daily oil equivalent production for 2024 was 170,751 BOE per day, compared to 131,813 BOE per day in 2023, reflecting significant growth[115]. - Average daily oil production for 2024 was 99,808 Bbl per day, a 32% increase from 75,457 Bbl per day in 2023[115]. - Average daily natural gas production for 2024 was 425.7 MMcf per day, a 26% increase from 338.1 MMcf per day in 2023[115]. - The company reported net production volumes of 36,530 MBbl of oil, 155.8 Bcf of natural gas, and a total oil equivalent of 62,495 MBOE, representing increases of 32% for oil and 26% for natural gas compared to 2023[100]. Operational Highlights - Capital expenditures for drilling, completing, and equipping wells in 2024 totaled $1.32 billion, within the estimated range of $1.15 to $1.35 billion[32]. - The company completed the Ameredev Acquisition, adding approximately 180 miles of gas gathering and oil transportation pipeline assets[39]. - The drilling program included the operation of nine drilling rigs, allowing flexibility to adjust based on commodity prices[60]. - The company drilled 262 productive wells in 2024, an increase from 246 in 2023, with 253 development wells and 9 exploration wells[156][157]. - The company has identified 5,361 potential future drilling locations in the Delaware Basin as of December 31, 2024[47]. - The company identified 5,080 gross (1,869 net) engineered locations for potential future drilling, with a total net lateral length of approximately 18.3 million feet, a 22% increase from 2023[59]. - The company had a total of 2,314 producing wells as of December 31, 2024, with 1,800 oil wells and 514 natural gas wells[119]. - The average working interest in operated wells was approximately 85% as of December 31, 2024[118]. Production and Reserves - Total proved oil and natural gas reserves increased by 34% to 606.2 million BOE, with 99% attributable to the Delaware Basin[58]. - Proved oil reserves grew by 33% from approximately 272.3 million Bbl at December 31, 2023 to approximately 361.8 million Bbl at December 31, 2024[127]. - Proved natural gas reserves increased by 33% from 1.13 Tcf at December 31, 2023 to 1.50 Tcf at December 31, 2024[127]. - The proved reserves to production ratio at December 31, 2024 was 9.8, an increase of 2% from 9.6 at December 31, 2023[127]. - The company added 71.5 million BOE in proved undeveloped reserves through extensions and discoveries during 2024[135]. - Total proved reserves as of December 31, 2024, include 361,842 MBbl of oil and 1,498.2 Bcf of natural gas, equating to 611,536 MBOE[140]. Environmental and Regulatory Compliance - The company achieved a 58% reduction in greenhouse gas emissions intensity in 2023 compared to 2019[48]. - The company aims to maximize natural gas capture from wells, utilizing vapor recovery units (VRUs) to reduce emissions and increase sellable volumes of natural gas[168]. - The company has implemented a leak detection and repair program, including the use of optical gas imaging cameras, to monitor and minimize emissions[169]. - The New Mexico Environment Department has implemented rules requiring a 98% natural gas capture rate by the end of 2026, impacting operational strategies[207]. - The company is subject to various environmental laws, including the Clean Water Act and the Oil Pollution Act, which can increase operational costs and impose penalties for noncompliance[200]. - The overall trend in environmental regulation is to impose more restrictions, which could materially affect operations and financial condition[214]. - The company operates underground injection wells for the safe and economical disposal of produced water, adhering to regulations from the Safe Drinking Water Act and state authorities[197]. Market and Competitive Landscape - The prices received for oil and natural gas fluctuate based on various market factors, including supply and demand dynamics and geopolitical conditions[160]. - Competition in the oil and natural gas industry is intense, with larger competitors having greater financial resources and operational capabilities[165]. - The company is subject to seasonal demand fluctuations, with higher demand for natural gas typically occurring in winter months[163]. Workforce and Human Resources - The company had 452 full-time employees as of December 31, 2024, with no employees covered by collective bargaining agreements[217]. - Employees completed approximately 22,500 hours of continuing education in 2024, averaging about 50 hours per employee[219]. Future Outlook and Challenges - The company plans to develop the remaining proved undeveloped reserves within five years of booking as of December 31, 2024[136]. - The company expects to hold or extend portions of certain expiring acreage in the Delaware Basin through future drilling activities[151]. - The outcome of ongoing litigation regarding drilling permits and lease sales remains uncertain, potentially impacting future operations[182]. - Legislative initiatives related to climate change may increase operating costs and reduce demand for oil and natural gas, adversely affecting profits[211].