Matador Resources(MTDR) - 2025 Q3 - Quarterly Results

Executive Summary This section summarizes Matador's Q3 2025 financial and operational performance, highlighting management's positive outlook and key achievements Management Commentary Matador's CEO highlighted significant dividend increases, a share repurchase program, and improved company rankings, reflecting strong financial health and positive outlook - Matador's Board increased the annual cash dividend from $1.25 to $1.50 per share, marking the seventh raise in four years, supported by strong liquidity and free cash flow[3] - As of October 21, 2025, Matador repurchased 1.3 million shares for approximately $55 million (weighted average price of $41 per share), representing over 1% of total outstanding shares[4][21] - Matador ranked 36th among DFW's top 150 public companies by 2024 revenue, advancing 11 places, and became the largest publicly-traded E&P company in DFW by revenue and profitability per employee[4] Q3 2025 Financial and Operational Highlights Matador achieved record production, exceeded guidance, reduced drilling costs, and significantly decreased its Reserves-Based Loan balance in Q3 2025 Q3 2025 Production Highlights | Metric | Q3 2025 Actual | Guidance Midpoint (July 2025) | Difference | YoY Gain (Q3 2024) | | :-------------------------------- | :------------- | :---------------------------- | :--------- | :----------------- | | Total BOE per day | 209,184 | 199,750 | +5% | +22% | | Oil production (barrels per day) | 119,556 | 117,250 | +2% | +19% | | Natural gas production (MMcf per day) | 537.8 | 495 | +9% | N/A | - Drilling and completion costs were approximately $855 per completed lateral foot, 3% less than the July 2025 guidance midpoint of $880[6] - Matador reduced its Reserves-Based Loan (RBL) balance by $105 million, from $390 million to $285 million by September 30, 2025[6][19] Guidance Updates This section details Matador's updated full-year 2025 guidance and provides an outlook for 2026, including production and capital expenditure forecasts Full-Year 2025 Guidance Update Matador increased full-year 2025 production guidance and capital expenditure estimates due to accelerated operations, while reducing drilling costs per lateral foot Full-Year 2025 Guidance Changes | Metric | Prior Full-Year 2025 Guidance | New Full-Year 2025 Guidance | | :------------------------ | :---------------------------- | :-------------------------- | | Total BOE per day | 200,000 to 205,000 | 205,500 to 206,500 | | Oil (Bbl per day) | 117,500 to 119,500 | 119,250 to 119,750 | | Natural Gas (MMcf per day) | 495 to 513 | 517.5 to 520.5 | | D/C/E CapEx | $1.18 to $1.37 billion | $1.47 to $1.55 billion | | Midstream CapEx | $120 to $180 million | $155 to $175 million | | Total CapEx | $1.30 to $1.55 billion | $1.625 to $1.725 billion | - The number of operated wells expected to be drilled and turned to sales in full-year 2025 increased from 106.3 net operated wells to 118.3 net operated wells[11] - Expected full-year 2025 drilling and completion cost per lateral foot decreased from $865 to $895 to a lower range of $835 to $855 per completed lateral foot[10][11] 2026 Outlook Matador anticipates organic production growth of 2-5% in 2026, reaching 210,000 BOE per day, while reducing total capital expenditures by 8-12% - Base case 2026 organic production is expected to be approximately 210,000 BOE per day, with organic oil production growth of 2 to 5% from 2025 to 2026 (exclusive of acquisitions)[11][13] - Matador expects an improved capital program for full-year 2026, resulting in 8 to 12% lower total capital expenditures compared to 2025 for approximately the same lateral footage[11][13] - Key priorities for 2026 include maintaining a strong balance sheet, growing proved reserves, increasing engineered inventory, continuing acreage acquisition, and enhancing midstream businesses[13] Operational Review This section reviews Matador's land program, upstream operations, and midstream business, highlighting strategic acquisitions, production achievements, and infrastructure developments Land Program Matador's 'brick-by-brick' land acquisition strategy in the Delaware Basin secured over 10 years of high-return drilling locations - Matador completed over $125 million in land transactions in the Delaware Basin during Q3 2025, primarily acquiring undeveloped acreage and working interests[7] - Targeted acquisitions provide Matador with over 10 years of engineered locations, boasting average rates of return of approximately 50% even at $50 per barrel oil prices[7] Upstream Operations Matador's Q3 2025 upstream operations exceeded production guidance, driven by strong well performance, accelerated execution, and improved capital efficiency - Matador exceeded the midpoint of July 2025 guidance for BOE volumes by 5%, delivering 209,184 BOE per day in Q3 2025, reflecting strong production and well outperformance[8] - Q3 2025 production included 1.5 Bcf (17 MMcf per day) from six non-operated Haynesville Shale wells, highlighting Matador's estimated 200 to 300 Bcf 'gas bank'[9][27] - Matador's overall completion efficiency increased by 20% in 2025 compared to 2024, driven by reduced drilling days and expanded use of advanced frac operations[12] - The Gavilon 104H Avalon well, online in September 2024, paid out in approximately one year, with cumulative production of 280,000 barrels of oil and 358 MMcf of natural gas by September 30, 2025, and over 85 potential future drilling locations[28] Midstream Operations (San Mateo) San Mateo, Matador's midstream business, significantly contributed to Q3 2025 revenue and efficiency through new infrastructure and record natural gas processing volumes - During September 2025, San Mateo commissioned the Ranger North Compressor station, designed for 30 MMcf per day (expandable to 70 MMcf per day), its first sour gas handling facility, increasing third-party optionality[15] - The Marlan plant expansion, in service Q2 2025, enabled San Mateo to process a record 533 MMcf per day of natural gas in Q3 2025, a 10% increase from Q2 2025[16] San Mateo Q3 2025 Financials and Throughput Volumes | Metric | Q3 2025 | Q2 2025 | Change (QoQ) | Q3 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------ | :----------- | | Net Income (millions) | $50 | N/A | N/A | N/A | N/A | | Adjusted EBITDA (millions) | $74 | N/A | N/A | N/A | N/A | | Natural gas gathering (MMcf per day) | 530 | 491 | +8% | 431 | +23% | | Natural gas processing (MMcf per day) | 533 | 486 | +10% | 424 | +26% | | Oil gathering and transportation (Bbl per day) | 58,400 | 50,300 | +16% | 52,300 | +12% | | Produced water handling (Bbl per day) | 413,700 | 414,400 | —% | 513,200 | -19% | Financial Performance This section reviews Matador's Q3 2025 financial summary, shareholder returns, realized commodity prices, and capital expenditures, highlighting key financial metrics and strategic allocations Q3 2025 Financial Summary Matador reported strong Q3 2025 financial results, including significant net income, increased operating cash flow, and reduced RBL borrowings Q3 2025 Key Financial Metrics | Metric | Q3 2025 | | :-------------------------------- | :-------- | | Net income | $176 million | | Earnings per share | $1.42 | | Adjusted earnings per share | $1.36 | | Net cash provided by operating activities | $722 million | | Adjusted EBITDA | $567 million | | Adjusted free cash flow | $93 million | - Net cash provided by operating activities increased by 44% from $501 million in Q2 2025 to $722 million in Q3 2025[18] - Matador paid down an additional $105 million on its RBL in Q3 2025, reducing total borrowings to $285 million, maintaining a strong balance sheet with a debt-to-EBITDA leverage ratio under 1.0x and approximately $2 billion in available liquidity[19] Shareholder Returns Matador demonstrated commitment to shareholder returns through a 20% dividend increase, a share repurchase program, and employee stock purchases - Matador's Board approved a 20% increase in the dividend policy, raising it from $1.25 annually ($0.3125 per quarter) to $1.50 annually ($0.375 per quarter), representing an annualized yield of approximately 3.5%[20] - Under its share repurchase authorization, Matador repurchased $55 million (1.3 million shares) of common stock at an average price of $41 per share, representing over 1% of total outstanding shares[21] - Matador's directors and executive officers purchased approximately 67,000 shares in 2025, with over 95% of employees participating in the Employee Share Purchase Plan (ESPP)[22] Q3 2025 Realized Commodity Prices Matador's Q3 2025 realized oil prices slightly increased sequentially but decreased year-over-year, while natural gas prices declined sequentially but increased year-over-year Realized Commodity Prices | Realized Commodity Prices | Q3 2025 | Q2 2025 | Sequential Change | Q3 2024 | YoY Change | | :------------------------ | :------ | :------ | :---------------- | :------ | :--------- | | Oil Prices, per Bbl | $64.91 | $64.34 | +1% | $75.67 | -14% | | Natural Gas Prices, per Mcf | $1.95 | $2.05 | -5% | $1.83 | +7% | Q3 2025 Capital Expenditures Matador's Q3 2025 D/C/E capital expenditures exceeded guidance due to accelerated operations, while midstream CapEx remained consistent Q3 2025 Capital Expenditures | ($ millions) | Actual | July 2025 Guidance | | :----------- | :----- | :----------------- | | D/C/E | $429.9 | $300 to $370 | | Midstream | $42.8 | $25 to $55 | - D/C/E CapEx was $95 million above guidance midpoint, primarily due to accelerating 4.5 net operated wells turned to sales ($15 million), unforecasted non-operated well activity ($15 million), increased working interest additions ($9 million), and Q4 2025 well costs ($56 million)[32] Fourth Quarter 2025 Estimates This section provides Matador's Q4 2025 estimates for production, wells turned to sales, and capital expenditures, outlining expected trends and operational plans Production Estimates Matador anticipates increased Q4 2025 oil production from new wells, but decreased natural gas production due to voluntary shut-ins and natural decline Q3 vs. Q4 2025 Production Comparison | Period | Average Daily Total Production (BOE per day) | Average Daily Oil Production (Bbl per day) | Average Daily Natural Gas Production (MMcf per day) | % Oil | | :----- | :--------------------------------------- | :--------------------------------------- | :------------------------------------------ | :---- | | Q3 2025 | 209,184 | 119,556 | 537.8 | 57% | | Q4 2025E | 205,000 to 208,000 | 119,000 to 121,000 | 516 to 522 | 58% | - Natural gas production is expected to decrease in Q4 2025 due to voluntary shut-ins of high natural gas to oil ratio wells (negative Waha prices) and natural decline from six non-operated Haynesville shale wells[37] Wells Turned to Sales Estimates Matador expects to turn to sales 27.5 net operated horizontal wells in Q4 2025, exceeding full-year expectations by 12 net wells, with more planned for early 2026 - Matador expects to turn to sales 27.5 net operated horizontal wells in the Delaware Basin during Q4 2025[39] - Due to accelerated activities, Matador expects to turn to sales 12 net wells more than previously expected for full-year 2025[39] - An additional 13.6 net operated horizontal wells are expected to be turned to sales in January 2026, projected to favorably increase production from 2025 to 2026[39] Capital Expenditure Estimates Matador forecasts a significant decrease in Q4 2025 D/C/E and midstream capital expenditures compared to Q3 2025, primarily due to completion timing - D/C/E CapEx for Q4 2025 is estimated to be $300 to $380 million, a 21% decrease from $429.9 million in Q3 2025[40] - Midstream CapEx for Q4 2025 is estimated to be $10 to $30 million, a 53% reduction from $42.8 million in Q3 2025[40] Company Information & Disclosures This section provides details on Matador's Q3 2025 earnings call, company overview, forward-looking statements, and contact information Third Quarter 2025 Earnings Conference Call Matador Resources Company will host a live conference call on October 22, 2025, to discuss Q3 2025 results, with replay available online - A live conference call will be held on Wednesday, October 22, 2025, at 10:00 a.m. Central Time to review Q3 2025 results[41] - Access to the live call is available via a registration link, with a replay available on the Company's website for one year[41][42] About Matador Resources Company Matador is an independent energy company focused on oil and natural gas E&P in the US, primarily in the Delaware Basin and Haynesville Shale, with midstream services - Matador is an independent energy company engaged in exploration, development, production, and acquisition of oil and natural gas resources in the United States[43] - Current operations primarily focus on the oil and liquids-rich Wolfcamp and Bone Spring plays in the Delaware Basin and the Haynesville shale and Cotton Valley plays in Northwest Louisiana[43] - The company also conducts midstream operations, providing natural gas processing, oil transportation, and gathering/disposal services for its own operations and third parties[43] Forward-Looking Statements This section provides a cautionary disclaimer regarding forward-looking statements, noting that actual results may differ due to risks and uncertainties - The press release includes 'forward-looking statements' related to future events, business, and financial performance, identified by words like 'expect,' 'anticipate,' and 'project'[45] - Actual results and future events could differ materially from those anticipated due to various risks and uncertainties, including economic conditions, commodity prices, operational execution, and regulatory actions[45][46] - Matador undertakes no obligation to update these forward-looking statements, and readers are cautioned not to place undue reliance on them[46] Contact Information Contact details for investor relations and the Chief Financial Officer are provided for inquiries - Contact for investor relations is Mac Schmitz (Senior Vice President - Investor Relations) at (972) 371-5225 or investors@matadorresources.com[47] - Contact for financial inquiries is Rob Macalik (Executive Vice President and Chief Financial Officer) at (972) 371-5413[47] Financial Statements & Non-GAAP Reconciliations This section presents Matador's selected financial and operating items, condensed consolidated financial statements, and reconciliations of non-GAAP financial measures Selected Financial and Operating Items This section provides a detailed tabular comparison of key financial and operating metrics for Q3 2025, Q2 2025, and Q3 2024 Selected Financial and Operating Items (Q3 2025 vs. Q2 2025 vs. Q3 2024) | Metric | Q3 2025 | Q2 2025 | Q3 2024 | | :------------------------------------------ | :------ | :------ | :------ | | Average Daily Production Volumes: | | | | | Oil (Bbl/d) | 119,556 | 122,875 | 100,315 | | Natural gas (MMcf/d) | 537.8 | 516.8 | 427.0 | | Total oil equivalent (BOE/d) | 209,184 | 209,013 | 171,480 | | Average Sales Prices: | | | | | Oil, without realized derivatives (per Bbl) | $64.91 | $64.34 | $75.67 | | Natural gas, without realized derivatives (per Mcf) | $1.95 | $2.05 | $1.83 | | Revenues (millions): | | | | | Oil and natural gas revenues | $810.2 | $815.8 | $770.2 | | Third-party midstream services revenues | $43.8 | $42.0 | $38.3 | | Other (millions): | | | | | Net income | $176.4 | $150.2 | $248.3 | | Earnings per common share (diluted) | $1.42 | $1.21 | $1.99 | | Adjusted EBITDA | $566.5 | $594.2 | $574.5 | | Net cash provided by operating activities | $721.7 | $501.0 | $610.4 | | Adjusted free cash flow | $93.4 | $132.7 | $196.1 | | D/C/E capital expenditures | $429.9 | $345.3 | $329.9 | | Midstream capital expenditures | $42.8 | $56.2 | $48.9 | Condensed Consolidated Balance Sheets The unaudited condensed consolidated balance sheets present Matador's financial position as of September 30, 2025, compared to December 31, 2024 Condensed Consolidated Balance Sheets (Unaudited) | (In thousands) | September 30, 2025 | December 31, 2024 | | :------------------------------------ | :----------------- | :---------------- | | Total current assets | $916,841 | $927,345 | | Net property and equipment | $10,559,908 | $9,764,096 | | Total assets | $11,646,708 | $10,850,109 | | Total current liabilities | $1,257,191 | $995,357 | | Borrowings under Credit Agreement | $285,000 | $595,500 | | Borrowings under San Mateo Credit Facility | $815,000 | $615,000 | | Senior unsecured notes payable | $2,119,554 | $2,114,908 | | Total long-term liabilities | $4,533,737 | $4,397,320 | | Total Matador Resources Company shareholders' equity | $5,505,961 | $5,089,149 | | Total liabilities and shareholders' equity | $11,646,708 | $10,850,109 | Condensed Consolidated Statements of Income The unaudited condensed consolidated statements of income detail revenues, expenses, and net income for the three and nine months ended September 30, 2025, and 2024 Condensed Consolidated Statements of Income (Unaudited) | (In thousands, except per share data) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total revenues | $939,015 | $899,783 | $2,848,285 | $2,534,612 | | Total expenses | $633,036 | $507,727 | $1,864,491 | $1,459,983 | | Operating income | $305,979 | $392,056 | $983,794 | $1,074,629 | | Net income attributable to Matador Resources Company shareholders | $176,364 | $248,291 | $566,674 | $670,789 | | Diluted Earnings per common share | $1.42 | $1.99 | $4.54 | $5.44 | Condensed Consolidated Statements of Cash Flows The unaudited condensed consolidated statements of cash flows detail cash generated from operating, investing, and financing activities for the three and nine months ended September 30, 2025, and 2024 Condensed Consolidated Statements of Cash Flows (Unaudited) | (In thousands) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $721,660 | $610,437 | $1,950,566 | $1,671,926 | | Net cash used in investing activities | $(562,961) | $(2,160,571) | $(1,569,635) | $(3,280,718) | | Net cash (used in) provided by financing activities | $(149,098) | $1,563,254 | $(379,286) | $1,579,517 | | Change in cash and restricted cash | $9,601 | $13,120 | $1,645 | $(29,275) | | Cash and restricted cash at end of period | $96,387 | $77,023 | $96,387 | $77,023 | Supplemental Non-GAAP Financial Measures This section defines and reconciles Matador's non-GAAP financial measures, including Adjusted EBITDA, Adjusted Net Income, and Adjusted Free Cash Flow, to comparable GAAP metrics Adjusted EBITDA Adjusted EBITDA is a non-GAAP measure used to evaluate operating performance, defined as earnings before interest, taxes, DDA, and other non-cash items, with reconciliations to GAAP metrics - Adjusted EBITDA is defined as earnings before interest, income taxes, depletion, depreciation, amortization, accretion of asset retirement obligations, property impairments, unrealized derivative gains/losses, non-recurring transaction costs, other non-cash items, non-cash stock-based compensation, and net gain/loss on asset sales and impairment[58] Adjusted EBITDA Reconciliation to Net Income (Matador Resources Company) | (In thousands) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :---------------------------------------------------- | :----------- | :----------- | :----------- | | Net income attributable to Matador Resources Company shareholders | $176,364 | $150,225 | $248,291 | | Net income | $200,624 | $182,359 | $272,677 | | Interest expense | $50,641 | $53,345 | $36,169 | | Total income tax provision | $59,128 | $56,462 | $85,321 | | Depletion, depreciation and amortization | $305,354 | $302,602 | $242,821 | | Adjusted EBITDA attributable to Matador Resources Company shareholders | $566,515 | $594,245 | $574,484 | Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities (Matador Resources Company) | (In thousands) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :---------------------------------------------------- | :----------- | :----------- | :----------- | | Net cash provided by operating activities | $721,660 | $501,027 | $610,437 | | Net change in operating assets and liabilities (working capital) | $(123,282) | $65,540 | $(15,367) | | Interest expense, net of non-cash portion | $46,948 | $49,672 | $33,469 | | Adjusted EBITDA attributable to Matador Resources Company shareholders | $566,515 | $594,245 | $574,484 | Adjusted Net Income and Adjusted Earnings Per Diluted Common Share Adjusted net income and adjusted EPS are non-GAAP measures that adjust net income for unrealized derivative gains/losses, impairment, and non-recurring items for clearer performance comparison - Adjusted net income and adjusted earnings per diluted common share are non-GAAP measures that adjust net income for unrealized derivative gains/losses, full-cost ceiling impairment charges, and non-recurring items, with related tax effects[63] Adjusted Net Income and Adjusted Earnings Per Share Reconciliation (Matador Resources Company) | (In thousands, except per share data) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :---------------------------------------------------- | :----------- | :----------- | :----------- | | Net income attributable to Matador Resources Company shareholders | $176,364 | $150,225 | $248,291 | | Unrealized (gain) loss on derivatives | $(19,952) | $37,313 | $(35,118) | | Adjusted net income attributable to Matador Resources Company shareholders (non-GAAP) | $169,268 | $190,943 | $236,002 | | Diluted Adjusted earnings per share attributable to Matador Resources Company shareholders (non-GAAP) | $1.36 | $1.53 | $1.89 | Adjusted Free Cash Flow Adjusted free cash flow is a non-GAAP measure modifying net cash from operating activities for working capital and capital expenditures, indicating internal funding, dividend, and debt management ability - Adjusted free cash flow is measured as net cash provided by operating activities, adjusted for working capital changes and cash performance incentives, less capital expenditures, adjusted for capital accruals[65] Adjusted Free Cash Flow Reconciliation (Matador Resources Company) | (In thousands) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | | Net cash provided by operating activities | $721,660 | $501,027 | $610,437 | | Net change in operating assets and liabilities (working capital) | $(123,282) | $65,540 | $(15,367) | | Total discretionary cash flow | $567,348 | $535,009 | $578,087 | | Total accrual-based capital expenditures | $473,948 | $402,335 | $381,940 | | Adjusted free cash flow | $93,400 | $132,674 | $196,147 | Adjusted Free Cash Flow Reconciliation (San Mateo - 100%) | (In thousands) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :------------------------------------ | :----------- | :----------- | :----------- | | Net cash provided by San Mateo operating activities | $99,417 | $23,305 | $50,496 | | Total San Mateo discretionary cash flow | $63,327 | $77,465 | $59,660 | | San Mateo accrual-based capital expenditures | $60,014 | $92,400 | $12,020 | | San Mateo adjusted free cash flow | $3,313 | $(14,935) | $47,640 |