Matador Resources Company (NYSE: MTDR) (“Matador” or the
“Company”) today reported financial and operating results for the
first quarter of 2024. A short slide presentation summarizing the
highlights of Matador’s first quarter 2024 earnings release is also
included on the Company’s website at www.matadorresources.com on
the Events and Presentations page under the Investor Relations
tab.
Full-Year 2024 Guidance Update
Effective April 23, 2024, Matador anticipates achieving the high
end of its full-year 2024 guidance range for total oil and natural
gas equivalent production, oil production and natural gas
production. For highlights of Matador’s first quarter 2024
operational and financial results, please see “First Quarter 2024
Matador Operational and Financial Highlights” on page 3 of this
earnings release. For comparisons of our first quarter 2024
operational and financial results to prior periods, please see
“Operational and Financial Update” on pages 4 to 6 of this earnings
release. For a description of certain selected financial and
operating items, please see “Selected Financial and Operating
Items” on page 9 of this earnings release.
Management Summary Comments
Joseph Wm. Foran, Matador’s Founder, Chairman and CEO,
commented, “Matador is pleased to report another quarter that
exceeded our original expectations due to the excellent operational
and financial execution by the Matador team. This outcome reflects
a total team effort and a long-term approach to managing Matador’s
business that has resulted in Matador outperforming the S&P
500, our peer group and the price of crude oil over the last three
years (see Slide A). Going forward, we remain focused—as a
team—on profitable growth at a measured pace, which has resulted in
over 30% oil production growth annually since we became a public
company in 2012 (see Slide B). Our Board, executive team and
staff are increasingly excited about the outlook for the remainder
of 2024 and beyond, as we continue to work together to build the
value of Matador for our shareholders and other interest
owners.
Better-Than-Expected Production and Cost
Savings
“During the first quarter of 2024, Matador’s total oil and
natural gas production averaged 149,760 barrels of oil and natural
gas equivalent (‘BOE’) per day, which was 3% better than our
announced guidance of an average of 145,750 BOE per day for the
quarter (see Slide C). Matador’s average oil production of
84,777 barrels of oil per day during the first quarter of 2024 was
2% better than our announced guidance average of 83,500 barrels of
oil per day for the quarter. This outperformance was primarily due
to continued better-than-expected production from the wells in our
Stateline asset area. We are pleased that, based upon this
outperformance, we now expect full-year production for 2024 at the
high end of our previously announced average production guidance
for oil of 91,000 to 95,000 barrels of oil per day, natural gas of
370 to 386 million cubic feet of natural gas per day and total
average 2024 production of 153,000 to 159,000 BOE per day.
“The third-party midstream force majeure and maintenance issues
Matador experienced during the first quarter of 2024 were largely
resolved by the beginning of the second quarter of 2024. Matador
was pleased that the operated cryogenic natural gas processing
plants owned by San Mateo Midstream, LLC (‘San Mateo’), our
midstream joint venture, and Pronto Midstream, LLC (‘Pronto’), our
wholly-owned midstream subsidiary, did not have any material
downtime for maintenance during the first quarter. This quarter
highlighted the importance and helpfulness of owning our own
midstream assets in the Delaware Basin to provide consistent flow
assurance for our oil and natural gas production (see Slide
D).
“Notably, we achieved these better-than-expected production
results while also reducing costs and increasing efficiencies.
Matador’s drilling, completing and equipping (‘D/C/E’) capital
expenditures for the first quarter of 2024 were approximately $35
million less than expected. Approximately $10 million of these cost
savings in the first quarter of 2024 was due to continued
operational and cost improvements by the drilling, completion,
production and midstream teams.
Continued Operational Innovation and
Midstream Execution
“As anticipated, we are also pleased to report during the first
quarter of 2024 that the natural gas pipeline connections between
Pronto and San Mateo and between Pronto and our Advance acreage
were completed on time and on budget (see Slide D).
Following the completion of these connections, Pronto and San Mateo
now have a combined 595 miles of a three-stream pipeline system,
including the midstream assets we acquired in the Advance
acquisition. These connections not only help resolve the
third-party midstream constraints we experienced in the first
quarter of 2024 but also will be important as we gather and process
the natural gas from our Dagger Lake South wells, which are a set
of 21 gross (18.9 net) wells on our Advance acreage scheduled to
begin producing in the second quarter of 2024.
“Planned construction of the expansion of Pronto’s Marlan
cryogenic natural gas processing plant currently remains on time
and on budget (see Slide D). The foundation work for the
expansion has already started, and we expect to begin installation
of structural steel and pipe racks during the second quarter of
2024. Matador continues to look forward to this expansion of the
Marlan processing plant being completed during the first half of
2025. Once expanded, the Marlan processing plant will serve
Matador’s growing operations as well as meet the needs of
third-party producers as they expand their operations in northern
Lea and Eddy Counties, New Mexico.
“Matador achieved approximately $10 million in cost efficiencies
in 2023 by successfully drilling our first two ‘U-Turn’ wells in
the Delaware Basin, which were drilled in record time and whose
production to date has been comparable to conventional two-mile
lateral wells. In the first quarter of 2024, our operations team
also continued to achieve cost efficiencies through innovation by
implementing one of the first ‘trimul-frac’ tests in the Delaware
Basin (see Slide E). In this test, daily completed lateral
footage increased 40% using ‘trimul-frac’ operations as compared to
our average 2023 ‘simul-frac’ operations. In addition to reduced
cycle times and accelerated production, Matador estimates that
‘trimul-frac’ operations will result in cost savings of $100,000
per well as compared to ‘simul-frac’ operations and $350,000 per
well as compared to conventional ‘zipper-frac’ operations. Matador
is continuing to explore other innovative ways to reduce costs as
it relates to logistics, improved rig performance and well
completions. We look forward to discussing these potential
cost-saving innovations in more detail on our future earnings
calls.
Strengthened Balance Sheet
“Matador took significant strides during and shortly after the
first quarter of 2024 to strengthen its balance sheet and to
position itself to take advantage of both operational and strategic
opportunities. First, on March 22, 2024, we amended our credit
facility to, among other things, (i) increase the maximum facility
amount from $2.0 billion to $3.5 billion, (ii) increase the current
elected borrowing commitment from $1.325 billion to $1.5 billion,
and (iii) extend the maturity date of our credit facility to 2029.
We are grateful for the agreement and approval of this amendment by
each of the 19 banks that comprise our high-quality bank group,
including the five new banks that joined in support of this new
amendment this past quarter (see Slide F). As of April 23,
2024, Matador had only $25 million of outstanding borrowings under
our credit facility and our leverage ratio was 0.75x. We expect our
leverage ratio to remain 1.0x or less for the remainder of
2024.
“Second, on March 28, 2024, we completed an approximate $350
million offering of 5,250,000 shares of our common stock, or
approximately 4% of our shares outstanding at the time of the
offering (see Slide G). The net proceeds of our equity
offering were used for general corporate purposes, including the
repayment of amounts outstanding under our credit facility. A
portion of the borrowings under our credit facility, along with our
free cash flow, were used to complete a number of acquisitions
since December 1, 2023. These acquisitions include producing oil
and natural gas properties, undeveloped acreage and royalty
interests in Eddy and Lea Counties, New Mexico and Ward County,
Texas with an aggregate purchase price of approximately $281
million. These acquisitions contributed approximately 1,350 BOE per
day (82% oil) in the aggregate to our production during the first
quarter of 2024 and included numerous additional locations across
our asset areas in the Delaware Basin. These transactions reflect
Matador’s ‘brick-by-brick’ acquisition approach that has served us
well in building our acreage position from only 7,500 net acres in
the Delaware Basin when we became a public company in 2012 to over
150,000 net acres in the Delaware Basin today.
“Third, on April 2, 2024, we completed a private offering of
$900 million of 6.50% senior notes due 2032, which was
oversubscribed by over $2.5 billion (see Slide H). As a
result of the high demand for these bonds, we increased the size of
the offering from $800 million to $900 million. The net proceeds of
our bond offering were used to repurchase and fund the announced
redemption of our 5.875% senior notes due 2026 and for general
corporate purposes, including the repayment of amounts outstanding
under our credit facility.
“These successful transactions were made possible because of the
years of teamwork and coordinated execution by our Board, staff,
shareholders, bondholders, banking partners and other friends. We
express our appreciation for all their extra effort and support
that has put Matador in a position of operational and financial
strength as we look forward to the future.”
First Quarter 2024 Matador Operational and Financial
Highlights (for comparisons to prior periods, please see the
remainder of this press release)
- Average production of 149,760 BOE per day (84,777 barrels of
oil per day)
- Net cash provided by operating activities of $468.6
million
- Adjusted free cash flow of $28.6 million
- Net income of $193.7 million, or $1.61 per diluted common
share
- Adjusted net income of $206.2 million, or adjusted earnings of
$1.71 per diluted common share
- Adjusted EBITDA of $505.4 million
- San Mateo net income of $39.7 million
- San Mateo Adjusted EBITDA of $58.2 million
- D/C/E capital expenditures of $350.7 million
- Midstream capital expenditures of $79.3 million
All references to Matador’s net income, adjusted net income,
Adjusted EBITDA and adjusted free cash flow reported throughout
this earnings release are those values attributable to Matador
Resources Company shareholders after giving effect to any net
income, adjusted net income, Adjusted EBITDA or adjusted free cash
flow, respectively, attributable to third-party non-controlling
interests, including in San Mateo Midstream, LLC (“San Mateo”).
Matador owns 51% of San Mateo. For a definition of adjusted net
income, adjusted earnings per diluted common share, Adjusted EBITDA
and adjusted free cash flow and reconciliations of such non-GAAP
financial metrics to their comparable GAAP metrics, please see
“Supplemental Non-GAAP Financial Measures” below.
Operational and Financial Update
First Quarter 2024 Oil, Natural Gas and Total Oil Equivalent
Production Above Expectations
While Matador’s average daily oil and natural gas production was
149,760 BOE per day in the first quarter of 2024, which was a 3%
sequential production decrease from 154,261 BOE in the fourth
quarter of 2023, Matador is pleased to report a 40% year-over-year
increase from 106,654 BOE per day in the first quarter of 2023.
Matador’s year-over-year increase is due not only to the Advance
acquisition that closed in April 2023 but also to increased
production from new wells drilled by Matador on its existing assets
and undeveloped acreage. In fact, Matador’s production for the
first quarter of 2024 of 149,760 BOE per day exceeded its announced
expectations for oil and natural gas production during the first
quarter of 2024 and grew significantly on a year-to-year basis as
summarized in the table below.
Production
Q1 2024 Average Daily Volume
Q1 2024 Guidance Range(1)
Difference(2)
Sequential(3)
YoY(4)
Total, BOE per day
149,760
145,000 to 146,500
+3% Better than Guidance
-3%
+40%
Oil, Bbl per day
84,777
83,000 to 84,000
+2% Better than Guidance
-4%
+44%
Natural Gas, MMcf per day
389.9
372.0 to 375.0
+4% Better than Guidance
-1%
+36%
(1) Production range previously projected,
as provided on February 20, 2024.
(2) As compared to midpoint of guidance
provided on February 20, 2024.
(3) Represents sequential percentage
change from the fourth quarter of 2023.
(4) Represents year-over-year percentage
change from the first quarter of 2023.
First Quarter 2024 Realized Commodity Prices
The following table summarizes Matador’s realized commodity
prices during the first quarter of 2024, as compared to the fourth
quarter of 2023 and the first quarter of 2023.
Sequential (Q1 2024 vs. Q4
2023)
YoY (Q1 2024 vs. Q1 2023)
Realized Commodity Prices
Q1 2024
Q4 2023
Sequential Change(1)
Q1 2024
Q1 2023
YoY Change(2)
Oil Prices, per Bbl
$77.58
$79.00
-2%
$77.58
$75.74
+2%
Natural Gas Prices, per Mcf
$2.96
$3.01
-2%
$2.96
$3.93
-25%
(1) First quarter 2024 as compared to
fourth quarter 2023.
(2) First quarter 2024 as compared to
first quarter 2023.
First Quarter 2024 Operating Expenses
Matador’s lease operating expenses increased 11% sequentially
from $5.06 per BOE in the fourth quarter of 2023 to $5.60 per BOE
for the first quarter of 2024. This increase is due in part to the
winterization of our assets in the first quarter of 2024 as well as
workover operations on certain of the wells acquired in the Advance
acquisition. The first quarter 2024 lease operating expenses of
$5.60 per BOE were consistent with Matador’s expected full-year
2024 lease operating expenses range of $5.25 to $5.75 per BOE.
Matador’s general and administrative (“G&A”) expenses
increased 5% sequentially from $2.08 per BOE in the fourth quarter
of 2023 to $2.18 per BOE in the first quarter of 2024. This
increase is due in part to the value of certain employee stock
awards that are settled in cash, which are remeasured at each
quarterly reporting period. These cash-settled stock award amounts
increased due to the 17% increase in Matador’s share price from
$56.86 at the end of the fourth quarter of 2023 to $66.77 at the
end of the first quarter of 2024. The first quarter 2024 G&A
expenses of $2.18 per BOE were consistent with Matador’s expected
full-year 2024 G&A expenses range of $2.00 to $2.50 per
BOE.
During the first quarter of 2024, Matador’s plant and other
midstream operating expenses, which include the costs to operate
San Mateo’s and Pronto’s assets, were $2.91 per BOE, a 14% increase
from $2.56 per BOE in the fourth quarter of 2023. This increase was
due to increased costs associated with weather, the expanding
midstream footprint and the sequential decrease in production,
which was also primarily due to weather and shut-in production
pursuant to third-party midstream maintenance requirements. Matador
continues to expect its midstream businesses to experience
full-year 2024 plant and other midstream operating expenses to
range from $2.25 to $2.75 per BOE.
First Quarter 2024 Capital Expenditures
Matador’s capital expenditures were $430 million during the
first quarter of 2024, which were less than expected when compared
to Matador’s announced expectation of $465 million for the quarter.
Matador’s D/C/E capital expenditures of $350.7 million for the
first quarter of 2024 were approximately $35 million lower than
expected, which is a result of $10 million in actual D/C/E capital
expenditure cost savings while the remaining $25 million was
deferred due to the timing of Matador’s operated and non-operated
projects. Midstream capital expenditures of $79.3 million for the
first quarter of 2024 were consistent with Matador’s expectations
of $80 million in total midstream capital expenditures for the
quarter.
Q1 2024 Capital Expenditures
($ millions)
Actual
Guidance(1)
Difference vs. Guidance(2)
D/C/E
$350.7
$385.0
-9%
Midstream
$79.3
$80.0
-1%
(1) Midpoint of guidance as provided on
February 20, 2024.
(2) As compared to the midpoint of
guidance provided on February 20, 2024.
Midstream Update
San Mateo’s operations in the first quarter of 2024 were
highlighted by better-than-expected operating and financial
results. These strong results primarily reflect
better-than-expected volumes delivered by third party customers
into the San Mateo system. San Mateo’s net income of $39.7 million
and Adjusted EBITDA of $58.2 million were each better than
expected.
Operationally, San Mateo’s natural gas gathering volumes in the
first quarter of 2024 were at an all-time quarterly high. The table
below sets forth San Mateo’s throughput volumes, as compared to the
fourth quarter of 2023 and the first quarter of 2024, in which all
volume categories experienced significant increases in throughput
volumes year-over-year, ranging from 13% to 27%.
Sequential (Q1 2024 vs. Q4
2023)
YoY (Q1 2024 vs. Q1 2023)
San Mateo Throughput Volumes
Q1 2024
Q4 2023
Change(1)
Q1 2024
Q1 2023
Change(2)
Natural gas gathering, MMcf per day
425
416
+2%
425
334
+27%
Natural gas processing, MMcf per day
399
413
(3%)
399
353
+13%
Oil gathering and transportation, Bbl per
day
48,800
50,900
(4%)
48,800
41,900
+16%
Produced water handling, Bbl per day
435,200
442,000
(2%)
435,200
373,000
+17%
(1) First quarter 2024 as compared to
fourth quarter 2023.
(2) First quarter 2024 as compared to
first quarter 2023.
Second Quarter 2024 Estimates
Second Quarter 2024 Estimated Oil, Natural Gas and Total Oil
Equivalent Production Growth
As noted in the table below, Matador anticipates its average
daily oil equivalent production of 149,760 BOE per day in the first
quarter of 2024 to grow by 5% to a midpoint of approximately
157,250 BOE per day in the second quarter of 2024.
Q1 and Q2 2024 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
Q1 2024
149,760
84,777
389.9
57%
Q2 2024E
156,500 to 158,000
92,500 to 93,500
384.0 to 387.0
59%
Second Quarter 2024 Estimated Wells Turned to Sales
At April 23, 2024, Matador expects to turn to sales a record 43
gross (36.2 net) operated horizontal wells in the Delaware Basin
during the second quarter of 2024, consisting of 29 gross (24.5
net) wells in the Antelope Ridge asset area, four gross (2.6 net)
wells in the Arrowhead asset area, four gross (3.1 net) wells in
the Rustler Breaks asset area and six gross (6.0 net) wells in the
Stateline asset area.
Second Quarter 2024 Estimated Capital Expenditures
Matador is currently operating eight drilling rigs in the
Delaware Basin. At April 23, 2024, Matador expects D/C/E capital
expenditures for the second quarter of 2024 will be approximately
$330 to $350 million, which is a 3% decrease as compared to $351
million for the first quarter of 2024. Matador estimates its
proportionate share of midstream capital expenditures to be
approximately $50 to $70 million in the second quarter of 2024,
which is a 24% decrease as compared to $79 million in the first
quarter of 2024, primarily due to the timing of Matador’s 2024
midstream projects and related efficiency gains.
Second Quarter 2024 Estimated Cash Taxes
Matador continues to expect to make cash tax payments of
approximately 5 to 10% of pre-tax book net income for the year
ended December 31, 2024. The Company’s cash tax payments will be
dependent upon a variety of factors that will impact taxable income
that cannot be calculated at this time, including commodity prices,
weather, allowable tax deductions and any state or federal
legislative changes thereon, acquisitions, activity of offset
operators and pipeline restrictions as well as any deductions or
tax credits generated and earned that would offset tax liabilities
in 2024.
Conference Call Information
The Company will host a live conference call on Wednesday, April
24, 2024, at 10:00 a.m. Central Time to review its first quarter
2024 operational and financial results. To access the live
conference call by phone, you can use the following link
https://register.vevent.com/register/BI7bfe41fe32ef489da07e10206cdcee3c
and you will be provided with dial in details. To avoid delays, it
is recommended that participants dial into the conference call 15
minutes ahead of the scheduled start time.
The live conference call will also be available through the
Company’s website at www.matadorresources.com on the Events and
Presentations page under the Investor Relations tab. The replay for
the event will be available on the Company’s website at
www.matadorresources.com on the Events and Presentations page under
the Investor Relations tab for one year.
About Matador Resources Company
Matador is an independent energy company engaged in the
exploration, development, production and acquisition of oil and
natural gas resources in the United States, with an emphasis on oil
and natural gas shale and other unconventional plays. Its current
operations are focused primarily on the oil and liquids-rich
portion of the Wolfcamp and Bone Spring plays in the Delaware Basin
in Southeast New Mexico and West Texas. Matador also operates in
the Eagle Ford shale play in South Texas and the Haynesville shale
and Cotton Valley plays in Northwest Louisiana. Additionally,
Matador conducts midstream operations in support of its
exploration, development and production operations and provides
natural gas processing, oil transportation services, oil, natural
gas and produced water gathering services and produced water
disposal services to third parties.
For more information, visit Matador Resources Company at
www.matadorresources.com.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. “Forward-looking statements” are statements related to
future, not past, events. Forward-looking statements are based on
current expectations and include any statement that does not
directly relate to a current or historical fact. In this context,
forward-looking statements often address expected future business
and financial performance, and often contain words such as “could,”
“believe,” “would,” “anticipate,” “intend,” “estimate,” “expect,”
“may,” “should,” “continue,” “plan,” “predict,” “potential,”
“project,” “hypothetical,” “forecasted” and similar expressions
that are intended to identify forward-looking statements, although
not all forward-looking statements contain such identifying words.
Such forward-looking statements include, but are not limited to,
statements about guidance, projected or forecasted financial and
operating results, future liquidity, the payment of dividends,
results in certain basins, objectives, project timing, expectations
and intentions, regulatory and governmental actions and other
statements that are not historical facts. Actual results and future
events could differ materially from those anticipated in such
statements, and such forward-looking statements may not prove to be
accurate. These forward-looking statements involve certain risks
and uncertainties, including, but not limited to, the following
risks related to financial and operational performance: general
economic conditions; the Company’s ability to execute its business
plan, including whether its drilling program is successful; changes
in oil, natural gas and natural gas liquids prices and the demand
for oil, natural gas and natural gas liquids; its ability to
replace reserves and efficiently develop current reserves; the
operating results of the Company’s midstream oil, natural gas and
water gathering and transportation systems, pipelines and
facilities, the acquiring of third-party business and the drilling
of any additional salt water disposal wells; costs of operations;
delays and other difficulties related to producing oil, natural gas
and natural gas liquids; delays and other difficulties related to
regulatory and governmental approvals and restrictions; impact on
the Company’s operations due to seismic events; its ability to make
acquisitions on economically acceptable terms; its ability to
integrate acquisitions; disruption from the Company’s acquisitions
making it more difficult to maintain business and operational
relationships; significant transaction costs associated with the
Company’s acquisitions; the risk of litigation and/or regulatory
actions related to the Company’s acquisitions; availability of
sufficient capital to execute its business plan, including from
future cash flows, available borrowing capacity under its revolving
credit facilities and otherwise; the operating results of and the
availability of any potential distributions from our joint
ventures; weather and environmental conditions; and the other
factors that could cause actual results to differ materially from
those anticipated or implied in the forward-looking statements. For
further discussions of risks and uncertainties, you should refer to
Matador’s filings with the Securities and Exchange Commission
(“SEC”), including the “Risk Factors” section of Matador’s most
recent Annual Report on Form 10-K and any subsequent Quarterly
Reports on Form 10-Q. Matador undertakes no obligation to update
these forward-looking statements to reflect events or circumstances
occurring after the date of this press release, except as required
by law, including the securities laws of the United States and the
rules and regulations of the SEC. You are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. All forward-looking
statements are qualified in their entirety by this cautionary
statement.
Selected Financial and Operating Items
Sequential and year-over-year quarterly comparisons of selected
financial and operating items are shown in the following table:
Three Months Ended
March 31, 2024
December 31, 2023
March 31, 2023
Net Production Volumes:(1)
Oil (MBbl)(2)
7,715
8,157
5,305
Natural gas (Bcf)(3)
35.5
36.2
25.8
Total oil equivalent (MBOE)(4)
13,628
14,192
9,599
Average Daily Production Volumes:(1)
Oil (Bbl/d)(5)
84,777
88,663
58,941
Natural gas (MMcf/d)(6)
389.9
393.6
286.3
Total oil equivalent (BOE/d)(7)
149,760
154,261
106,654
Average Sales Prices:
Oil, without realized derivatives (per
Bbl)
$
77.58
$
79.00
$
75.74
Oil, with realized derivatives (per
Bbl)
$
77.58
$
79.00
$
75.74
Natural gas, without realized derivatives
(per Mcf)(8)
$
2.96
$
3.01
$
3.93
Natural gas, with realized derivatives
(per Mcf)
$
2.97
$
2.92
$
4.07
Revenues (millions):
Oil and natural gas revenues
$
703.5
$
753.2
$
502.9
Third-party midstream services
revenues
$
32.4
$
35.6
$
26.5
Realized gain (loss) on derivatives
$
0.3
$
(3.1
)
$
3.7
Operating Expenses (per BOE):
Production taxes, transportation and
processing
$
5.15
$
5.31
$
5.78
Lease operating
$
5.60
$
5.06
$
4.63
Plant and other midstream services
operating
$
2.91
$
2.56
$
3.23
Depletion, depreciation and
amortization
$
15.58
$
15.51
$
13.16
General and administrative(9)
$
2.18
$
2.08
$
2.34
Total(10)
$
31.42
$
30.52
$
29.14
Other (millions):
Net sales of purchased natural gas(11)
$
10.0
$
7.2
$
5.8
Net income (millions)(12)
$
193.7
$
254.5
$
163.1
Earnings per common share
(diluted)(12)
$
1.61
$
2.12
$
1.36
Adjusted net income (millions)(12)(13)
$
206.2
$
238.4
$
180.0
Adjusted earnings per common share
(diluted)(12)(14)
$
1.71
$
1.99
$
1.50
Adjusted EBITDA (millions)(12)(15)
$
505.4
$
552.8
$
365.2
Net cash provided by operating activities
(millions)(16)
$
468.6
$
618.3
$
339.5
Adjusted free cash flow
(millions)(12)(17)
$
28.6
$
180.5
$
57.2
San Mateo net income (millions)(18)
$
39.7
$
43.7
$
32.2
San Mateo Adjusted EBITDA
(millions)(15)(18)
$
58.2
$
61.6
$
48.7
San Mateo net cash provided by operating
activities (millions)(18)
$
54.0
$
45.5
$
53.6
San Mateo adjusted free cash flow
(millions)(16)(17)(18)
$
34.7
$
18.8
$
31.7
D/C/E capital expenditures (millions)
$
350.7
$
261.4
$
294.8
Midstream capital expenditures
(millions)(19)
$
79.3
$
86.2
$
8.7
(1) Production volumes reported in two
streams: oil and natural gas, including both dry and liquids-rich
natural gas.
(2) One thousand barrels of oil.
(3) One billion cubic feet of natural
gas.
(4) One thousand barrels of oil
equivalent, estimated using a conversion ratio of one barrel of oil
per six thousand cubic feet of natural gas.
(5) Barrels of oil per day.
(6) Millions of cubic feet of natural gas
per day.
(7) Barrels of oil equivalent per day,
estimated using a conversion ratio of one barrel of oil per six
thousand cubic feet of natural gas.
(8) Per thousand cubic feet of natural
gas.
(9) Includes approximately $0.21, $0.20
and $0.24 per BOE of non-cash, stock-based compensation expense in
the first quarter of 2024, the fourth quarter of 2023 and the first
quarter of 2023, respectively.
(10) Total does not include the impact of
purchased natural gas or immaterial accretion expenses.
(11) Net sales of purchased natural gas
reflect those natural gas purchase transactions that the Company
periodically enters into with third parties whereby the Company
purchases natural gas and (i) subsequently sells the natural gas to
other purchasers or (ii) processes the natural gas at either the
San Mateo or Pronto cryogenic natural gas processing plants and
subsequently sells the residue natural gas and natural gas liquids
to other purchasers. Such amounts reflect revenues from sales of
purchased natural gas of $49.4 million, $43.4 million and $34.3
million less expenses of $39.4 million, $36.2 million and $28.4
million in the first quarter of 2024, the fourth quarter of 2023
and the first quarter of 2023, respectively.
(12) Attributable to Matador Resources
Company shareholders.
(13) Adjusted net income is a non-GAAP
financial measure. For a definition of adjusted net income and a
reconciliation of adjusted net income (non-GAAP) to net income
(GAAP), please see “Supplemental Non-GAAP Financial Measures.”
(14) Adjusted earnings per diluted common
share is a non-GAAP financial measure. For a definition of adjusted
earnings per diluted common share and a reconciliation of adjusted
earnings per diluted common share (non-GAAP) to earnings per
diluted common share (GAAP), please see “Supplemental Non-GAAP
Financial Measures.”
(15) Adjusted EBITDA is a non-GAAP
financial measure. For a definition of Adjusted EBITDA and a
reconciliation of Adjusted EBITDA (non-GAAP) to net income (GAAP)
and net cash provided by operating activities (GAAP), please see
“Supplemental Non-GAAP Financial Measures.”
(16) As reported for each period on a
consolidated basis, including 100% of San Mateo’s net cash provided
by operating activities.
(17) Adjusted free cash flow is a non-GAAP
financial measure. For a definition of adjusted free cash flow and
a reconciliation of adjusted free cash flow (non-GAAP) to net cash
provided by operating activities (GAAP), please see “Supplemental
Non-GAAP Financial Measures.”
(18) Represents 100% of San Mateo’s net
income, Adjusted EBITDA, net cash provided by operating activities
or adjusted free cash flow for each period reported.
(19) Includes Matador’s share of estimated
capital expenditures for San Mateo and other wholly-owned midstream
projects, including projects completed by Pronto.
Matador Resources Company and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except par value and share
data)
March 31, 2024
December 31,
2023
ASSETS
Current assets
Cash
$
23,208
$
52,662
Restricted cash
51,118
53,636
Accounts receivable
Oil and natural gas revenues
278,155
274,192
Joint interest billings
207,540
163,660
Other
42,778
35,102
Derivative instruments
3,027
2,112
Lease and well equipment inventory
39,927
41,808
Prepaid expenses and other current
assets
108,382
92,700
Total current assets
754,135
715,872
Property and equipment, at cost
Oil and natural gas properties, full-cost
method
Evaluated
9,973,110
9,633,757
Unproved and unevaluated
1,407,512
1,193,257
Midstream properties
1,398,601
1,318,015
Other property and equipment
40,901
40,375
Less accumulated depletion, depreciation
and amortization
(5,441,274
)
(5,228,963
)
Net property and equipment
7,378,850
6,956,441
Other assets
Derivative instruments
1,718
558
Other long-term assets
92,626
54,125
Total other assets
94,344
54,683
Total assets
$
8,227,329
$
7,726,996
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable
$
121,823
$
68,185
Accrued liabilities
419,791
365,848
Royalties payable
178,506
161,983
Amounts due to affiliates
13,495
28,688
Advances from joint interest owners
37,725
19,954
Other current liabilities
80,001
40,617
Total current liabilities
851,341
685,275
Long-term liabilities
Borrowings under Credit Agreement
260,000
500,000
Borrowings under San Mateo Credit
Facility
526,000
522,000
Senior unsecured notes payable
1,185,567
1,184,627
Asset retirement obligations
90,361
87,485
Deferred income taxes
625,682
581,439
Other long-term liabilities
52,216
38,482
Total long-term liabilities
2,739,826
2,914,033
Shareholders’ equity
Common stock - $0.01 par value,
160,000,000 shares authorized; 124,835,154 and 119,478,282 shares
issued; and 124,780,297 and 119,458,674 shares outstanding,
respectively
1,248
1,194
Additional paid-in capital
2,472,681
2,133,172
Retained earnings
1,946,412
1,776,541
Treasury stock, at cost, 54,857 and 19,608
shares, respectively
(2,091
)
(45
)
Total Matador Resources Company
shareholders’ equity
4,418,250
3,910,862
Non-controlling interest in
subsidiaries
217,912
216,826
Total shareholders’ equity
4,636,162
4,127,688
Total liabilities and shareholders’
equity
$
8,227,329
$
7,726,996
Matador Resources Company and
Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME - UNAUDITED
(In thousands, except per share data)
Three Months Ended
March 31,
2024
2023
Revenues
Oil and natural gas revenues
$
703,540
$
502,909
Third-party midstream services
revenues
32,357
26,511
Sales of purchased natural gas
49,446
34,254
Realized gain on derivatives
275
3,669
Unrealized gain (loss) on derivatives
2,075
(7,067
)
Total revenues
787,693
560,276
Expenses
Production taxes, transportation and
processing
70,153
55,486
Lease operating
76,295
44,407
Plant and other midstream services
operating
39,623
31,045
Purchased natural gas
39,432
28,448
Depletion, depreciation and
amortization
212,311
126,325
Accretion of asset retirement
obligations
1,273
699
General and administrative
29,653
22,433
Total expenses
468,740
308,843
Operating income
318,953
251,433
Other income (expense)
Interest expense
(39,562
)
(16,176
)
Other income
577
339
Total other expense
(38,985
)
(15,837
)
Income before income taxes
279,968
235,596
Income tax provision (benefit)
Current
17,272
4,929
Deferred
49,506
51,743
Total income tax provision
66,778
56,672
Net income
213,190
178,924
Net income attributable to non-controlling
interest in subsidiaries
(19,461
)
(15,794
)
Net income attributable to Matador
Resources Company shareholders
$
193,729
$
163,130
Earnings per common share
Basic
$
1.62
$
1.37
Diluted
$
1.61
$
1.36
Weighted average common shares
outstanding
Basic
119,721
119,034
Diluted
120,253
119,702
Matador Resources Company and
Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS - UNAUDITED
(In thousands)
Three Months Ended
March 31,
2024
2023
Operating activities
Net income
$
213,190
$
178,924
Adjustments to reconcile net income to net
cash provided by operating activities
Unrealized (gain) loss on derivatives
(2,075
)
7,067
Depletion, depreciation and
amortization
212,311
126,325
Accretion of asset retirement
obligations
1,273
699
Stock-based compensation expense
2,838
2,290
Deferred income tax provision
49,506
51,743
Amortization of debt issuance cost and
other debt-related costs
4,644
838
Other non-cash changes
(333
)
—
Changes in operating assets and
liabilities
Accounts receivable
(55,519
)
40,906
Lease and well equipment inventory
(2,044
)
(4,423
)
Prepaid expenses and other current
assets
(1,474
)
(16,517
)
Other long-term assets
254
35
Accounts payable, accrued liabilities and
other current liabilities
(4,814
)
(39,871
)
Royalties payable
16,522
376
Advances from joint interest owners
17,771
(9,805
)
Income taxes payable
16,025
723
Other long-term liabilities
487
190
Net cash provided by operating
activities
468,562
339,500
Investing activities
Drilling, completion and equipping capital
expenditures
(236,639
)
(224,144
)
Acquisition of oil and natural gas
properties
(202,264
)
(103,863
)
Midstream capital expenditures
(105,086
)
(14,141
)
Expenditures for other property and
equipment
(226
)
(1,769
)
Proceeds from sale of assets
900
451
Net cash used in investing activities
(543,315
)
(343,466
)
Financing activities
Repayments of borrowings under Credit
Agreement
(930,000
)
—
Borrowings under Credit Agreement
690,000
—
Repayments of borrowings under San Mateo
Credit Facility
(65,000
)
(55,000
)
Borrowings under San Mateo Credit
Facility
69,000
65,000
Cost to amend credit facilities
(11,292
)
(8,645
)
Proceeds from issuance of common stock
344,663
—
Cost to issue equity
(53
)
—
Dividends paid
(23,858
)
(17,768
)
Contributions related to formation of San
Mateo
1,500
14,700
Contributions from non-controlling
interest owners of less-than-wholly-owned subsidiaries
7,350
—
Distributions to non-controlling interest
owners of less-than-wholly-owned subsidiaries
(25,725
)
(19,110
)
Taxes paid related to net share settlement
of stock-based compensation
(13,515
)
(18,909
)
Other
(289
)
(204
)
Net cash provided by (used in) financing
activities
42,781
(39,936
)
Change in cash and restricted cash
(31,972
)
(43,902
)
Cash and restricted cash at beginning of
period
106,298
547,330
Cash and restricted cash at end of
period
$
74,326
$
503,428
Supplemental Non-GAAP Financial Measures
Adjusted EBITDA
This press release includes the non-GAAP financial measure of
Adjusted EBITDA. Adjusted EBITDA is a supplemental non-GAAP
financial measure that is used by management and external users of
the Company’s consolidated financial statements, such as securities
analysts, investors, lenders and rating agencies. “GAAP” means
Generally Accepted Accounting Principles in the United States of
America. The Company believes Adjusted EBITDA helps it evaluate its
operating performance and compare its results of operations from
period to period without regard to its financing methods or capital
structure. The Company defines, on a consolidated basis and for San
Mateo, Adjusted EBITDA as earnings before interest expense, income
taxes, depletion, depreciation and amortization, accretion of asset
retirement obligations, property impairments, unrealized derivative
gains and losses, non-recurring transaction costs for certain
acquisitions, certain other non-cash items and non-cash stock-based
compensation expense and net gain or loss on asset sales and
impairment. Adjusted EBITDA is not a measure of net income or net
cash provided by operating activities as determined by GAAP. All
references to Matador’s Adjusted EBITDA are those values
attributable to Matador Resources Company shareholders after giving
effect to Adjusted EBITDA attributable to third-party
non-controlling interests, including in San Mateo.
Adjusted EBITDA should not be considered an alternative to, or
more meaningful than, net income or net cash provided by operating
activities as determined in accordance with GAAP or as an indicator
of the Company’s operating performance or liquidity. Certain items
excluded from Adjusted EBITDA are significant components of
understanding and assessing a company’s financial performance, such
as a company’s cost of capital and tax structure. Adjusted EBITDA
may not be comparable to similarly titled measures of another
company because all companies may not calculate Adjusted EBITDA in
the same manner. The following table presents the calculation of
Adjusted EBITDA and the reconciliation of Adjusted EBITDA to the
GAAP financial measures of net income and net cash provided by
operating activities, respectively, that are of a historical
nature. Where references are pro forma, forward-looking,
preliminary or prospective in nature, and not based on historical
fact, the table does not provide a reconciliation. The Company
could not provide such reconciliation without undue hardship
because such Adjusted EBITDA numbers are estimations,
approximations and/or ranges. In addition, it would be difficult
for the Company to present a detailed reconciliation on account of
many unknown variables for the reconciling items, including future
income taxes, full-cost ceiling impairments, unrealized gains or
losses on derivatives and gains or losses on asset sales and
impairment. For the same reasons, the Company is unable to address
the probable significance of the unavailable information, which
could be material to future results.
Adjusted EBITDA – Matador Resources Company
Three Months Ended
March 31,
December 31,
March 31,
(In thousands)
2024
2023
2023
Unaudited Adjusted EBITDA
Reconciliation to Net Income:
Net income attributable to Matador
Resources Company shareholders
$
193,729
$
254,539
$
163,130
Net income attributable to non-controlling
interest in subsidiaries
19,461
21,402
15,794
Net income
213,190
275,941
178,924
Interest expense
39,562
35,707
16,176
Total income tax provision
66,778
57,459
56,672
Depletion, depreciation and
amortization
212,311
220,055
126,325
Accretion of asset retirement
obligations
1,273
1,234
699
Unrealized (gain) loss on derivatives
(2,075
)
(6,983
)
7,067
Non-cash stock-based compensation
expense
2,838
2,884
2,290
(Income) expense related to contingent
consideration and other
—
(3,298
)
942
Consolidated Adjusted EBITDA
533,877
582,999
389,095
Adjusted EBITDA attributable to
non-controlling interest in subsidiaries
(28,507
)
(30,202
)
(23,871
)
Adjusted EBITDA attributable to Matador
Resources Company shareholders
$
505,370
$
552,797
$
365,224
Three Months Ended
March 31,
December 31,
March 31,
(In thousands)
2024
2023
2023
Unaudited Adjusted EBITDA
Reconciliation to Net Cash Provided by Operating
Activities:
Net cash provided by operating
activities
$
468,562
$
618,347
$
339,500
Net change in operating assets and
liabilities
12,792
(77,946
)
28,386
Interest expense, net of non-cash
portion
34,918
33,656
15,338
Current income tax provision
17,272
4,964
4,929
Other non-cash and non-recurring
expense
333
3,978
942
Adjusted EBITDA attributable to
non-controlling interest in subsidiaries
(28,507
)
(30,202
)
(23,871
)
Adjusted EBITDA attributable to Matador
Resources Company shareholders
$
505,370
$
552,797
$
365,224
Adjusted EBITDA – San Mateo (100%)
Three Months Ended
March 31,
December 31,
March 31,
(In thousands)
2024
2023
2023
Unaudited Adjusted EBITDA
Reconciliation to Net Income:
Net income
$
39,718
$
43,682
$
32,232
Depletion, depreciation and
amortization
9,170
9,179
8,457
Interest expense
9,193
8,683
7,948
Accretion of asset retirement
obligations
97
92
80
Adjusted EBITDA
$
58,178
$
61,636
$
48,717
Three Months Ended
March 31,
December 31,
March 31,
(In thousands)
2024
2023
2023
Unaudited Adjusted EBITDA
Reconciliation to Net Cash Provided by Operating
Activities:
Net cash provided by operating
activities
$
54,005
$
45,463
$
53,635
Net change in operating assets and
liabilities
(4,746
)
7,757
(12,617
)
Interest expense, net of non-cash
portion
8,919
8,416
7,699
Adjusted EBITDA
$
58,178
$
61,636
$
48,717
Adjusted Net Income and Adjusted Earnings
Per Diluted Common Share
This press release includes the non-GAAP financial measures of
adjusted net income and adjusted earnings per diluted common share.
These non-GAAP items are measured as net income attributable to
Matador Resources Company shareholders, adjusted for dollar and per
share impact of certain items, including unrealized gains or losses
on derivatives, the impact of full cost-ceiling impairment charges,
if any, and non-recurring transaction costs for certain
acquisitions or other non-recurring income or expense items, along
with the related tax effect for all periods. This non-GAAP
financial information is provided as additional information for
investors and is not in accordance with, or an alternative to, GAAP
financial measures. Additionally, these non-GAAP financial measures
may be different than similar measures used by other companies. The
Company believes the presentation of adjusted net income and
adjusted earnings per diluted common share provides useful
information to investors, as it provides them an additional
relevant comparison of the Company’s performance across periods and
to the performance of the Company’s peers. In addition, these
non-GAAP financial measures reflect adjustments for items of income
and expense that are often excluded by securities analysts and
other users of the Company’s financial statements in evaluating the
Company’s performance. The table below reconciles adjusted net
income and adjusted earnings per diluted common share to their most
directly comparable GAAP measure of net income attributable to
Matador Resources Company shareholders.
Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
(In thousands, except per share data)
Unaudited Adjusted Net Income and
Adjusted Earnings Per Share Reconciliation to
Net Income:
Net income attributable to Matador
Resources Company shareholders
$
193,729
$
254,539
$
163,130
Total income tax provision
66,778
57,459
56,672
Income attributable to Matador Resources
Company shareholders before taxes
260,507
311,998
219,802
Less non-recurring and unrealized charges
to income before taxes:
Unrealized (gain) loss on derivatives
(2,075
)
(6,983
)
7,067
Expense (income) related to contingent
consideration and other
2,580
(3,298
)
942
Adjusted income attributable to Matador
Resources Company shareholders before taxes
261,012
301,717
227,811
Income tax expense(1)
54,813
63,361
47,840
Adjusted net income attributable to
Matador Resources Company shareholders (non-GAAP)
$
206,199
$
238,356
$
179,971
Weighted average shares outstanding -
basic
119,721
119,192
119,034
Dilutive effect of options and restricted
stock units
532
779
668
Weighted average common shares outstanding
- diluted
120,253
119,971
119,702
Adjusted earnings per share attributable
to Matador Resources Company
shareholders (non-GAAP)
Basic
$
1.72
$
2.00
$
1.51
Diluted
$
1.71
$
1.99
$
1.50
(1) Estimated using federal statutory tax
rate in effect for the period.
Adjusted Free Cash Flow
This press release includes the non-GAAP financial measure of
adjusted free cash flow. This non-GAAP item is measured, on a
consolidated basis for the Company and for San Mateo, as net cash
provided by operating activities, adjusted for changes in working
capital and cash performance incentives that are not included as
operating cash flows, less cash flows used for capital
expenditures, adjusted for changes in capital accruals. On a
consolidated basis, these numbers are also adjusted for the cash
flows related to non-controlling interest in subsidiaries that
represent cash flows not attributable to Matador shareholders.
Adjusted free cash flow should not be considered an alternative to,
or more meaningful than, net cash provided by operating activities
as determined in accordance with GAAP or an indicator of the
Company’s liquidity. Adjusted free cash flow is used by the
Company, securities analysts and investors as an indicator of the
Company’s ability to manage its operating cash flow, internally
fund its D/C/E capital expenditures, pay dividends and service or
incur additional debt, without regard to the timing of settlement
of either operating assets and liabilities or accounts payable
related to capital expenditures. Additionally, this non-GAAP
financial measure may be different than similar measures used by
other companies. The Company believes the presentation of adjusted
free cash flow provides useful information to investors, as it
provides them an additional relevant comparison of the Company’s
performance, sources and uses of capital associated with its
operations across periods and to the performance of the Company’s
peers. In addition, this non-GAAP financial measure reflects
adjustments for items of cash flows that are often excluded by
securities analysts and other users of the Company’s financial
statements in evaluating the Company’s cash spend.
The table below reconciles adjusted free cash flow to its most
directly comparable GAAP measure of net cash provided by operating
activities. All references to Matador’s adjusted free cash flow are
those values attributable to Matador shareholders after giving
effect to adjusted free cash flow attributable to third-party
non-controlling interests, including in San Mateo.
Adjusted Free Cash Flow - Matador Resources Company
Three Months Ended
March 31,
December 31,
March 31,
(In thousands)
2024
2023
2023
Net cash provided by operating
activities
$
468,562
$
618,347
$
339,500
Net change in operating assets and
liabilities
12,792
(77,946
)
28,386
San Mateo discretionary cash flow
attributable to non-controlling interest in subsidiaries(1)
(24,137
)
(26,078
)
(20,099
)
Performance incentives received from Five
Point
1,500
14,500
14,700
Total discretionary cash flow
458,717
528,823
362,487
Drilling, completion and equipping capital
expenditures
236,639
337,332
224,144
Midstream capital expenditures
105,086
90,110
14,141
Expenditures for other property and
equipment
226
672
1,769
Net change in capital accruals
95,342
(62,957
)
69,758
San Mateo accrual-based capital
expenditures related to non-controlling interest in
subsidiaries(2)
(7,138
)
(16,846
)
(4,567
)
Total accrual-based capital
expenditures(3)
430,155
348,311
305,245
Adjusted free cash flow
$
28,562
$
180,512
$
57,242
(1) Represents Five Point Energy LLC’s
(“Five Point”) 49% interest in San Mateo discretionary cash flow,
as computed below.
(2) Represents Five Point’s 49% interest
in accrual-based San Mateo capital expenditures, as computed
below.
(3) Represents drilling, completion and
equipping costs, Matador’s share of San Mateo capital expenditures
plus 100% of other midstream capital expenditures not associated
with San Mateo.
Adjusted Free Cash Flow - San Mateo (100%)
Three Months Ended
March 31,
December 31,
March 31,
(In thousands)
2024
2023
2023
Net cash provided by San Mateo operating
activities
$
54,005
$
45,463
$
53,635
Net change in San Mateo operating assets
and liabilities
(4,746
)
7,757
(12,617
)
Total San Mateo discretionary cash
flow
49,259
53,220
41,018
San Mateo capital expenditures
23,211
39,633
12,376
Net change in San Mateo capital
accruals
(8,644
)
(5,253
)
(3,056
)
San Mateo accrual-based capital
expenditures
14,567
34,380
9,320
San Mateo adjusted free cash flow
$
34,692
$
18,840
$
31,698
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240423093451/en/
Mac Schmitz Senior Vice President - Investor Relations (972)
371-5225 investors@matadorresources.com
Grafico Azioni Matador Resources (NYSE:MTDR)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Matador Resources (NYSE:MTDR)
Storico
Da Set 2023 a Set 2024