Matador Resources(US:MTDR)2025-10-24 20:18Production 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].