Matador Resources Company (NYSE: MTDR) (“Matador” or the
“Company”) today reported financial and record operating results
for the third quarter of 2024, increased full-year 2024 guidance
and expects to produce over 200,000 barrels of oil and natural gas
equivalent (“BOE”) per day in 2025. A short slide presentation
summarizing the highlights of Matador’s third 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.
Management Commentary
Joseph Wm. Foran, Matador’s Founder, Chairman and CEO,
commented, “Matador’s third quarter of 2024 was one of the best
quarters in Matador’s history with record production and the
closing of our largest acquisition to date. Before highlighting
these record results, I wanted to take a moment and point to one of
the factors that evidences the confidence Matador’s management
team, staff and Board of Directors have in the Company’s continuing
positive outlook over the years. Recently, The Wall Street Journal
published a front-page article noting that insider purchases of
company stock have significantly decreased in 2024 (see Slide
A). For the public record, I wish to state clearly that Matador
is not one of these companies. In fact, Matador’s executive
officers and directors have purchased approximately $1,400,000 of
Matador stock over just the last twelve months, and since the
beginning of 2021, Matador’s executive officers have made 27
separate open market purchases totaling 50,000 shares of Matador
stock for approximately $2,000,000. During that time, Matador is
not only the only company among its peers where management has
purchased more shares than management has sold but also Matador’s
executive officers have yet to sell a single share (see Slide
B). This confidence in Matador’s future extends throughout the
Company, as over 95% of Matador’s employees participate in its
Employee Stock Purchase Plan.
“Our confidence in Matador’s future is bolstered by the long
track record of success achieved by both Matador I and Matador II.
Over the last 40 years, Matador I and II have consistently grown
shareholder value regardless of structure, industry cycles or
volatility in commodity prices. Starting from scratch in 2003 with
just $6 million in beginning equity capital, Matador II has grown
to a market cap of approximately $6.5 billion. Matador now owns
nearly 200,000 net acres in the Delaware Basin, which is believed
by many to be the best basin in the United States. The Delaware
Basin is also where we have 10 to 15 years of inventory with an
average rate of return in excess of over 50% and rank among the top
producers there in both size and profitability (see Slide
C). During 2025, Matador expects to produce a record average
amount of at least 200,000 BOE per day. Furthermore, Matador
presently has over 600 million BOE in proved oil and natural gas
reserves—again a record amount and a gain of nearly 150 million BOE
over this same time period a year ago (see Slide D). Matador
can also count on a midstream business that we estimate to be worth
more than $1.5 billion net to Matador (see Slide I).
Financially, Matador maintains a strong balance sheet with over
$1.25 billion in liquidity as of September 30, 2024.
“All of these accomplishments are connected to the teamwork,
planning and execution by Matador’s Board, management, staff,
vendors, leaseholders, banks and other friends. We try to come into
work with a focus on how each of us can get better each day and how
we can help the team and the Company get better each day. This
focus has resulted in the organizational excellence that allows me
to say that our team thinks that there is still plenty of work to
do but Matador’s future has truly never been brighter.
Integration of the Ameredev
Acquisition
“One of the significant accomplishments during the third quarter
of 2024 was the closing of the Ameredev acquisition (see Slide
E). The positive benefits of this contiguous block of 33,500
net acres are already exceeding our expectations. Production from
the Ameredev assets averaged 31,500 BOE per day following the
closing of the acquisition on September 18, 2024. In fact,
production from the first seven wells turned to sales since the
effective date of the acquisition have exceeded our expectations by
over 10% and averaged 1,975 BOE per day (76% oil) during 24-hour
initial production tests.
“Similar to the acquisition of our Advance properties in 2023,
integration of the Ameredev assets is off to a great start. We
moved a drilling rig to the Ameredev acreage the weekend following
closing and this quarter we expect to implement operational
efficiencies such as ‘simul-frac’ and ‘trimul-frac’ completion
operations, dual fuel technologies and other operational
efficiencies on the Ameredev properties, which we expect to result
in synergies of approximately $160 million within the next five
years. Our production team is now operating the six existing
Ameredev facilities and is working hard to improve the lease
operating expenses elsewhere on the Ameredev assets. We expect that
these efforts could result in additional operational synergies of
over $1 million per month.
“The Ameredev acquisition included an approximate 19% equity
interest in the parent company of Piñon Midstream. Piñon recently
announced that it expects to sell to an affiliate of Enterprise
Products Partners L.P. in the fourth quarter of 2024, subject to
customary regulatory approvals. We currently expect to receive
between $110 million and $120 million from the sale of this 19%
interest. We expect to use these proceeds to repay borrowings under
our revolving credit facility and help reduce our leverage ratio
from the current level of 1.3 times to less than one times.
“The smooth integration of the Ameredev properties is the result
of the hard work, the experience and extra efforts of many office
and field personnel at Matador, Ameredev and EnCap. We are very
grateful for the professionalism of the Ameredev and EnCap teams
both before and after closing the acquisition. We thank them for
their part in making this acquisition a true win-win for all the
parties involved.
Record Production While Increasing
Efficiencies and Decreasing Costs
“During the third quarter of 2024, Matador achieved record
production on its existing properties while continuing to implement
new ways to gain additional operational efficiencies and reduce
well costs (see Slide F). Matador achieved record average
total production of 171,480 BOE per day during the third quarter of
2024, which was 5% better than our guidance. Matador’s record
average oil production of 100,315 barrels of oil per day during the
third quarter of 2024 was 3% better than our guidance.
“Notably, in the third quarter of 2023, Matador produced an
average of 135,000 BOE per day. In comparison, for the fourth
quarter of 2024, a year later, Matador’s guidance is 198,000 BOE
per day. Matador achieved a 32% increase in net cash provided by
operating activities of $610.4 million in the third quarter of
2024, as compared to net cash provided by operating activities of
$461.0 million in the third quarter of 2023. The record oil and
natural gas production during the third quarter of 2024 led to a
significant jump in Adjusted Free Cash Flow to $196.1 million for
the third quarter of 2024, which was an increase of 36% as compared
to the Adjusted Free Cash Flow of $144.6 million for the third
quarter of 2023. Matador is using this Adjusted Free Cash Flow
primarily to repay outstanding borrowings under our revolving
credit facility as well as for payment of our dividend and our
brick-by-brick acquisitions.
“Operational efficiencies, good wells and strong vendor
relationships continue to drive average well costs lower. We
currently estimate that full-year 2024 drilling and completion
costs will be improved to between $925 and $935 per completed
lateral foot, which is an 8% reduction from our original guidance
of $1,010 per completed lateral foot estimated at the first of the
year for calendar year 2024.
“Much of the efficiency savings achieved by Matador during 2024
were driven by embracing certain operational innovations occurring
in the Delaware Basin such as U-Turn wells, remote hydraulic
fracturing operations and the optimization of simul-frac and
trimul-frac completion operations. For an example of our
improvement in this regard, we expect to turn-in-line five new
U-Turn wells during the fourth quarter of 2024. In doing so, we
have successfully reduced drill cycle times on these five U-Turn
wells by 30% as compared to the U-Turn wells we turned to sales in
2023. Remote simul-frac was utilized on four of the five 2024
U-Turn wells providing additional cost savings in the completing of
these wells. The team estimated $3 million in cost savings per
U-Turn well when compared to the alternative of drilling eight
one-mile lateral length wells of equal aggregate length. The
primary driver of these savings is the elimination of four vertical
wellbores. Drilling four U-Turn wells only requires four vertical
wellbores to drill and complete eight miles of lateral length as
compared to drilling eight one-mile single-direction lateral length
wells that require eight vertical wellbores to complete eight miles
of lateral length (see Slide G).
“Building upon the successful trimul-frac pilot test in the
second quarter of 2024, Matador successfully completed two
additional trimul-frac completions in the third quarter of 2024,
including its first remote trimul-frac completion. Remote hydraulic
fracturing operations continue to increase simul-frac and
trimul-frac opportunities, which has resulted in simul-frac and
trimul-frac completions on 90 wells that otherwise would have been
completed using traditional zipper-frac completion operations.
Simul-frac operations result in savings of approximately $250,000
per well while trimul-frac operations result in savings of
approximately $350,000 per well.
“These operational efficiencies include savings generated from
the 300-plus drilling records set by our MaxCom Center assisting
the operating group. When the collective savings generated by these
efficiencies are added up, such efficiencies have resulted in total
estimated operational savings of $135 million since 2022 (see
Slide G). As a result, Matador’s tradition of drilling
better wells for less money has enabled Matador to have the highest
revenue per BOE and profit per BOE among our peers (see Slide
H).
Midstream Assets Continue to Provide
Value
“Our record results during the third quarter of 2024 were made
possible by the close coordination between our upstream and
midstream teams. Matador’s midstream business creates value by
providing flow assurance for our production in addition to the
economic benefits of owning a profitable and growing midstream
business (see Slide I). San Mateo, our midstream joint
venture, owns and operates the Black River Processing Plant, which
has a designed inlet capacity of 460 million cubic feet of natural
gas per day. Pronto, our wholly-owned midstream subsidiary, owns
and operates the Marlan Processing Plant, which has a designed
inlet capacity of 60 million cubic feet of natural gas per day. The
Black River Processing Plant and the Marlan Processing Plant had a
combined uptime of over 99% during the third quarter of 2024. This
high percentage of uptime provides reliability and flow assurance
to both Matador and third-party participants (see Slide
J).
“San Mateo also achieved record water handling volumes of
513,000 barrels per day during the third quarter of 2024 due in
part to increased volumes from our third-party participants. These
record processing and water volumes led to a 66% increase in record
San Mateo net income of $49.8 million during the third quarter of
2024 as compared to the third quarter of 2023, and a 45% increase
in record Adjusted EBITDA of $68.5 million during the third quarter
of 2024 as compared to the third quarter of 2023 (see Slide
J). Pronto’s 200 million cubic feet per day expansion of the
Marlan Processing Plant remains on track to be operational during
the first half of 2025. This new processing plant will provide
additional flow assurance and economic benefits for Matador, its
shareholders and its third-party participants.
Strong Balance Sheet
“Matador completed the Ameredev acquisition and achieved record
results during the third quarter of 2024 while continuing to
maintain a strong balance sheet. As part of the financing of the
Ameredev acquisition, we amended our credit facility to increase
the elected commitment under the revolving credit facility to $2.25
billion and provide for a term loan of $250 million. Shortly after
the Ameredev acquisition closed on September 18, 2024, Matador
opportunistically issued $750 million of 6.25% senior notes to
repay the term loan and a portion of the borrowings under the
revolving credit facility (see Slide K). We believe the
issuance of these notes was extremely successful as it was more
than three times oversubscribed and was essentially debt neutral
for Matador as it did not materially add to Matador’s debt but
instead merely extended the term. At September 30, 2024, Matador
had $955 million outstanding under its revolving credit facility
with a leverage ratio of 1.3 times. Matador expects to return to a
leverage ratio of 1.0 times or less by the middle of 2025 at
current oil and natural gas prices, expected operating results and
the anticipated proceeds to us from the sale of Piñon
Midstream.
Dividend Increase
“Last week, in light of our progress on various fronts and our
outlook going forward, our Board of Directors increased our fixed
quarterly dividend by 25% to $0.25 per quarter, or $1.00 per share
on an annual basis, from the prior dividend of $0.20 per quarter
(see Slide L). This was the fifth dividend increase in four
years and is further evidence of the confidence of the Board and
our senior staff in Matador’s future. Since 2021, Matador has
doubled the value of its assets and returned $230 million in
dividends to its shareholders.
Looking Ahead to 2025 Operational
Flexibility
“Matador expects continued records and consistently improving
operational execution in 2025. We anticipate that average total
production will exceed 200,000 BOE per day (60% oil) during 2025
with our current nine rig program (see Slide M).
Importantly, we have positioned Matador to be able to modify our
drilling program without material costs to Matador if oil prices
were to substantially decrease or to increase activity if other
appealing opportunities should arise. Please also see our growing
and improving environmental work in our 2023 Sustainability Report,
which is available on request. Nevertheless, we have hedged
approximately 30% to 40% of our oil production through June 2025 to
protect our balance sheet and ensure that we can continue to return
value to our shareholders. Historically, Matador has often made its
greatest operational progress during difficult times, and we
believe we are well positioned to make such progress again if that
situation occurs.
Closing Thoughts
“Matador’s Board, management and staff remain optimistic about
the future of the oil and natural gas business as well as Matador’s
opportunities for continued success. The quality of our acreage in
the Delaware Basin, our differentiated midstream business, our
experienced and proven staff, our consistent execution over 40
years and our financial stability all make Matador an inviting
investment (see Slide N). We have come a long way from
starting Matador I in 1983 with $270,000 in beginning equity
capital and from starting Matador II in 2003 with beginning equity
capital of only $6 million. According to The Dallas Morning News’
most recent list of the 50 largest public companies in Dallas,
Matador has grown to be the largest exploration and production
public company in Dallas and the 17th most profitable public
company across all industries in the Dallas-Fort Worth area in 2023
(see Slide O). Today, we have assets valued at over $11
billion and fully expect to continue in the coming years our
history of profitable growth at a measured pace (see Slide
P). Matador looks forward to finishing the year on a strong
note and to delivering another year of continued strong
organizational performance and results.”
Third Quarter 2024 Matador Operational and Financial
Highlights (for comparisons to prior periods, please see the
remainder of this press release)
- Average production of 171,480 BOE per day (100,315 barrels of
oil per day)
- Net cash provided by operating activities of $610.4
million
- Adjusted free cash flow of $196.1 million
- Net income of $248.3 million, or $1.99 per diluted common
share
- Adjusted net income of $236.0 million, or adjusted earnings of
$1.89 per diluted common share
- Adjusted EBITDA of $574.5 million
- San Mateo net income of $49.8 million
- San Mateo Adjusted EBITDA of $68.5 million
- Drilling, completing and equipping (“D/C/E”) capital
expenditures of $329.9 million
- Midstream capital expenditures of $48.9 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.
Full-Year 2024 Guidance Update
Effective October 22, 2024, Matador increased its full-year 2024
guidance range for total oil and natural gas equivalent production,
oil production and natural gas production as set forth in the table
below. This increased production guidance includes expected
production from Matador’s acquisition of a subsidiary of Ameredev
II Parent, LLC (“Ameredev”).
In addition, Matador’s operations team continues to reduce
drilling and completion times, which has allowed Matador to advance
completion operations for 11 wells on its Firethorn and Pimento
acreage that was acquired in the Ameredev acquisition into the
fourth quarter of 2024, as opposed to completing most of these
wells in the first quarter of 2025. Accelerating these completions
should allow Matador to make more capital-efficient use of its
stimulation crews that will enable Matador to turn to sales these
additional wells in January 2025, which is two to three months
earlier than previously expected. In addition, Matador optimized
its drill schedule during 2024 and now expects to turn to sales
101.9 net operated wells for full-year 2024 as compared to its
prior expectation of 97.9 net operated wells turned to sales during
full-year 2024. As a result of accelerating the completion of the
11 additional wells and the 4.0 additional net operated wells
expected to be turned to sales in 2024, Matador increased its
full-year 2024 capital expenditure guidance range by $50 million as
set forth in the table below.
Production
Prior Full-Year 2024
Guidance Range
New Full-Year 2024
Guidance Range
Difference(1)
Total, BOE per day
158,500 to 163,500
167,500 to 172,500
+6%
Oil, Bbl per day
93,500 to 96,500
98,500 to 101,500
+5%
Natural Gas, MMcf per day
390.0 to 402.0
414.0 to 426.0
+6%
D/C/E CapEx(2)
$1.10 to $1.30 billion
$1.15 to $1.35 billion
+4%
Midstream CapEx(3)
$200 to $250 million
$200 to $250 million
No Change
Total CapEx
$1.30 to $1.55 billion
$1.35 to $1.60 billion
+4%
(1)
The midpoint of guidance provided on
October 22, 2024 as compared to the midpoint of guidance provided
on July 23, 2024.
(2)
Capital expenditures associated with
drilling, completing and equipping wells.
(3)
Includes Matador’s share of estimated
capital expenditures for San Mateo and other wholly-owned midstream
projects, including projects competed by Pronto. Excludes the
acquisition cost of Ameredev’s midstream assets.
Operational and Financial Update
Third Quarter 2024
Record Oil, Natural Gas and Total Oil and
Natural Gas Equivalent Production
As summarized in the table below, Matador’s total oil and
natural gas production averaged 171,480 BOE per day in the third
quarter of 2024, which was a 7% sequential production increase from
an average of 160,305 BOE per day in the second quarter of 2024 and
a 27% year-over-year increase from an average of 135,096 BOE per
day in the third quarter of 2023. The increase in total average
production is due to better-than-expected initial production from
new wells drilled by Matador during the third quarter of 2024 in
addition to continued strong performance of our existing wells,
especially the 21 gross (19 net) Dagger Lake South wells that were
acquired as part of the Advance acquisition in 2023 and turned to
sales in the second quarter of 2024. These factors resulted in
Matador’s total oil and natural gas production during the third
quarter of 2024 exceeding Matador’s guidance expectations by
5%.
Production
Q3 2024 Average
Daily Volume
Q3 2024
Guidance Range(1)
Difference(2)
Sequential(3)
YoY(4)
Total, BOE per day
171,480
163,000 to 165,000
+5% Better than Guidance
+7%
+27%
Oil, Bbl per day
100,315
96,500 to 97,500
+3% Better than Guidance
+5%
+29%
Natural Gas, MMcf per day
427.0
399.0 to 405.0
+6% Better than Guidance
+10%
+24%
(1)
Production range previously projected, as
provided on July 23, 2024.
(2)
As compared to midpoint of guidance
provided on July 23, 2024.
(3)
Represents sequential percentage change
from the second quarter of 2024.
(4)
Represents year-over-year percentage
change from the third quarter of 2023.
Third Quarter 2024 Realized Commodity
Prices
The following table summarizes Matador’s realized commodity
prices during the third quarter of 2024, as compared to the second
quarter of 2024 and the third quarter of 2023.
Sequential (Q3 2024 vs. Q2
2024)
YoY (Q3 2024 vs. Q3 2023)
Realized Commodity Prices
Q3 2024
Q2 2024
Sequential
Change(1)
Q3 2024
Q3 2023
YoY
Change(2)
Oil Prices, per Bbl
$75.67
$81.20
-7%
$75.67
$82.49
-8%
Natural Gas Prices, per Mcf
$1.83
$2.00
-9%
$1.83
$3.56
-49%
(1)
Third quarter 2024 as compared to second
quarter 2024.
(2)
Third quarter 2024 as compared to third
quarter 2023.
Third Quarter 2024
Expenses
Matador’s lease operating expenses (“LOE”) increased 1%
sequentially from $5.42 per BOE in the second quarter of 2024 to
$5.50 per BOE in the third quarter of 2024. This increase is due in
part to increased repair and maintenance costs in the third quarter
of 2024 and costs related to operating the Ameredev properties
after closing the transaction on September 18, 2024, partially
offset by increased production. Due to the historically higher LOE
per BOE on the Ameredev properties, Matador expects the fourth
quarter 2024 LOE to be between $5.75 to $6.25 per BOE. As a result,
Matador narrowed its expected range for full-year 2024 LOE to $5.55
to $5.75 per BOE from its previously expected and announced range
of $5.25 to $5.75 per BOE. Matador anticipates reducing the
historically higher LOE per BOE on the Ameredev properties in the
fourth quarter of 2024 and into 2025.
Matador’s general and administrative (“G&A”) expenses
decreased 5% sequentially from $1.91 per BOE in the second quarter
of 2024 to $1.82 per BOE in the third quarter of 2024, which was a
record low for Matador. This decrease is due in part to increased
production volumes and a decrease in the value of certain employee
stock awards that are settled in cash, which are measured at each
quarterly reporting period. The value of these cash-settled stock
awards decreased due to the 17% decrease in Matador’s share price
from $59.60 at the end of the second quarter of 2024 to $49.42 at
the end of the third quarter of 2024. As of October 22, 2024,
Matador expects full-year 2024 G&A expenses to be between $1.80
and $2.00 per BOE, below its previous expected and announced range
of $2.00 to $2.50 per BOE.
Matador’s depletion, depreciation and amortization expense
decreased 1% sequentially from $15.49 per BOE in the second quarter
of 2024 to $15.39 per BOE in the third quarter of 2024. This
decrease was primarily due to cost savings in Matador’s D/C/E
capital expenditures discussed below, which were offset by the
impacts of the purchase price of Ameredev. Due to the favorable
impact of the Ameredev purchase price, Matador expects depletion,
depreciation and amortization expense in the fourth quarter of 2024
to be between $15.75 and $16.25 per BOE, which is less than our
prior expectations for these expenses in the fourth quarter of
2024. As a result, Matador is lowering its full-year 2024 guidance
range from $15.75 to $16.75 per BOE to $15.50 to $15.90 per
BOE.
Third Quarter 2024 Capital
Expenditures
Matador’s D/C/E capital expenditures of $329.9 million for the
third quarter of 2024 were approximately $20 million lower than
expected due to cost savings that were the result of the
operational efficiencies and teamwork noted above. Midstream
capital expenditures of $48.9 million for the third quarter of 2024
were below Matador’s expectations of $55 million in total midstream
capital expenditures for the quarter, as approximately $6 million
in capital expenditures was deferred due to the timing of Pronto’s
midstream projects.
Q3 2024 Capital Expenditures
($ millions)
Actual
Guidance(1)
Difference vs. Guidance(2)
D/C/E
$329.9
$350.0
-6%
Midstream(3)
$48.9
$55.0
-11%
(1)
Midpoint of guidance as provided on July
23, 2024.
(2)
As compared to the midpoint of guidance
provided on July 23, 2024.
(3)
Excludes the acquisition cost of
Ameredev’s midstream assets.
Midstream Update
San Mateo’s operations in the third quarter of 2024 were
highlighted by better-than-expected operating and financial
results. These strong results primarily reflect
better-than-expected volumes delivered by Matador and third-party
customers into the San Mateo system. San Mateo’s net income of
$49.8 million and Adjusted EBITDA of $68.5 million were each
quarterly records.
The table below sets forth San Mateo’s throughput volumes, as
compared to the second quarter of 2024 and the third quarter of
2023.
Sequential (Q3 2024 vs. Q2
2024)
YoY (Q3 2024 vs. Q3 2023)
San Mateo Throughput Volumes
Q3 2024
Q2 2024
Change(1)
Q3 2024
Q3 2023
Change(2)
Natural gas gathering, MMcf per day
431
393
+10%
431
350
+23%
Natural gas processing, MMcf per day
460
355
+30%
460
385
+19%
Oil gathering and transportation, Bbl per
day
52,300
46,300
+13%
52,300
40,200
+30%
Produced water handling, Bbl per day
513,200
429,800
+19%
513,200
354,000
+45%
(1)
Third quarter 2024 as compared to second
quarter 2024.
(2)
Third quarter 2024 as compared to third
quarter 2023.
Fourth Quarter 2024 Estimates
Fourth 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 171,480 BOE per day in the third
quarter of 2024 to grow by 15% to a midpoint of approximately
198,000 BOE per day in the fourth quarter of 2024. This production
growth is a result of the production associated with the Ameredev
acquisition as well as continued strong results from Matador’s
existing assets.
Q3 and Q4 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
Q3 2024
171,480
100,315
427.0
59%
Q4 2024E
197,000 to 199,000
118,500 to 119,500
472.0 to 476.0
60%
Fourth Quarter 2024 Estimated Wells
Turned to Sales
At October 22, 2024, Matador expects to turn to sales 33 gross
(26.9 net) operated horizontal wells in the Delaware Basin during
the fourth quarter of 2024, consisting of 24 gross (21.0 net) wells
in the Antelope Ridge asset area and nine gross (5.9 net) wells in
the Rustler Breaks asset area.
Fourth Quarter 2024 Estimated Capital
Expenditures
Matador is currently operating nine drilling rigs in the
Delaware Basin and expects to operate nine drilling rigs for the
remainder of 2024. Matador elected to accelerate the completion of
11 additional wells on the newly acquired Ameredev properties and
expects 4.0 additional net operated wells to be turned to sales in
2024 on other properties. Due to this accelerated timing
difference, Matador increased its full-year 2024 capital
expenditure guidance range by $50 million. At October 22, 2024,
Matador expects D/C/E capital expenditures for the fourth quarter
of 2024 will be approximately $205 to $305 million, which is still
a 23% decrease as compared to $329.9 million for the third quarter
of 2024. Matador estimates its proportionate share of midstream
capital expenditures (over 90% allocated to Pronto) to be
approximately $42 to $62 million in the fourth quarter of 2024,
which is a 6% increase as compared to $48.9 million in the third
quarter of 2024 due to the construction schedule of Pronto’s new
processing plant, which is on time and on budget.
Improved Estimate and Outlook for 2024
Cash Taxes
Matador recognized a current tax benefit of $21.1 million during
the third quarter of 2024 and is lowering its expected cash tax
payments from 5% to 10% of pre-tax book net income to 1% to 5% of
pre-tax book net income for the year ending December 31, 2024. This
improvement is due to the additional tax deductions related to the
preliminary estimate of the allocation of value acquired as part of
the Ameredev acquisition. In addition, the Company anticipates that
it will not be subject to the Corporate Alternative Minimum Tax in
2025 based upon estimated qualifying taxable income for 2024.
Conference Call Information
The Company will host a live conference call on Wednesday,
October 23, 2024, at 10:00 a.m. Central Time to review its third
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/BI7913e6f5b9e94b8b9b83dc122a0d4273
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, natural gas,
oil 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 the anticipated benefits, opportunities and
results with respect to the Ameredev acquisition, 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, disruption from the Company’s
acquisitions, including the Ameredev acquisition, making it more
difficult to maintain business and operational relationships;
significant transaction costs associated with the Company’s
acquisitions, including the Ameredev acquisition; the risk of
litigation and/or regulatory actions related to the Company’s
acquisitions, including the Ameredev acquisition, as well as 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, including the Ameredev
acquisition; 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
September 30,
2024
June 30,
2024
September 30,
2023
Net Production Volumes:(1)
Oil (MBbl)(2)
9,229
8,689
7,133
Natural gas (Bcf)(3)
39.3
35.4
31.8
Total oil equivalent (MBOE)(4)
15,776
14,588
12,429
Average Daily Production Volumes:(1)
Oil (Bbl/d)(5)
100,315
95,488
77,529
Natural gas (MMcf/d)(6)
427.0
388.9
345.4
Total oil equivalent (BOE/d)(7)
171,480
160,305
135,096
Average Sales Prices:
Oil, without realized derivatives (per
Bbl)
$
75.67
$
81.20
$
82.49
Oil, with realized derivatives (per
Bbl)
$
75.67
$
81.20
$
82.49
Natural gas, without realized derivatives
(per Mcf)(8)
$
1.83
$
2.00
$
3.56
Natural gas, with realized derivatives
(per Mcf)
$
1.94
$
2.11
$
3.34
Revenues (millions):
Oil and natural gas revenues
$
770.2
$
776.3
$
701.5
Third-party midstream services
revenues
$
38.3
$
32.7
$
29.9
Realized gain (loss) on derivatives
$
4.5
$
3.8
$
(7.0
)
Operating Expenses (per BOE):
Production taxes, transportation and
processing
$
4.61
$
5.27
$
5.77
Lease operating
$
5.50
$
5.42
$
5.34
Plant and other midstream services
operating
$
2.77
$
2.55
$
2.48
Depletion, depreciation and
amortization
$
15.39
$
15.49
$
15.51
General and administrative(9)
$
1.82
$
1.91
$
2.55
Total(10)
$
30.09
$
30.64
$
31.65
Other (millions):
Net sales of purchased natural gas(11)
$
20.4
$
11.0
$
2.7
Net income (millions)(12)
$
248.3
$
228.8
$
263.7
Earnings per common share
(diluted)(12)
$
1.99
$
1.83
$
2.20
Adjusted net income (millions)(12)(13)
$
236.0
$
255.9
$
223.4
Adjusted earnings per common share
(diluted)(12)(14)
$
1.89
$
2.05
$
1.86
Adjusted EBITDA (millions)(12)(15)
$
574.5
$
578.1
$
508.3
Net cash provided by operating activities
(millions)(16)
$
610.4
$
592.9
$
461.0
Adjusted free cash flow
(millions)(12)(17)
$
196.1
$
167.0
$
144.6
San Mateo net income (millions)(18)
$
49.8
$
38.3
$
29.9
San Mateo Adjusted EBITDA
(millions)(15)(18)
$
68.5
$
58.0
$
47.1
San Mateo net cash provided by operating
activities (millions)(18)
$
50.5
$
48.1
$
36.5
San Mateo adjusted free cash flow
(millions)(16)(17)(18)
$
47.6
$
35.2
$
10.7
D/C/E capital expenditures (millions)
$
329.9
$
314.5
$
296.0
Midstream capital expenditures
(millions)(19)
$
48.9
$
45.3
$
41.7
(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 $0.27, $0.40 and
$0.37 per BOE of non-cash, stock-based compensation expense in the
third quarter of 2024, the second quarter of 2024 and the third
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 $51.7 million, $46.3 million and $40.3
million less expenses of $31.2 million, $35.2 million and $37.6
million in the third quarter of 2024, the second quarter of 2024
and the third 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. Excludes the
acquisition cost of Ameredev’s midstream assets in 2024.
Matador Resources Company and
Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS -
UNAUDITED
(In thousands, except par value and share
data)
September 30,
2024
December 31,
2023
ASSETS
Current assets
Cash
$
23,277
$
52,662
Restricted cash
53,746
53,636
Accounts receivable
Oil and natural gas revenues
297,757
274,192
Joint interest billings
255,724
163,660
Other
52,656
35,102
Derivative instruments
25,697
2,112
Lease and well equipment inventory
34,119
41,808
Prepaid expenses and other current
assets
104,210
92,700
Total current assets
847,186
715,872
Property and equipment, at cost
Oil and natural gas properties, full-cost
method
Evaluated
12,035,981
9,633,757
Unproved and unevaluated
1,757,034
1,193,257
Midstream properties
1,617,007
1,318,015
Other property and equipment
45,676
40,375
Less accumulated depletion, depreciation
and amortization
(5,910,029
)
(5,228,963
)
Net property and equipment
9,545,669
6,956,441
Other assets
Equity method investment
115,000
—
Derivative instruments
2,336
558
Other long-term assets
113,100
54,125
Total other assets
230,436
54,683
Total assets
$
10,623,291
$
7,726,996
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable
$
114,206
$
68,185
Accrued liabilities
474,238
365,848
Royalties payable
224,554
161,983
Amounts due to affiliates
28,321
28,688
Advances from joint interest owners
55,059
19,954
Other current liabilities
69,577
40,617
Total current liabilities
965,955
685,275
Long-term liabilities
Borrowings under Credit Agreement
955,000
500,000
Borrowings under San Mateo Credit
Facility
526,000
522,000
Senior unsecured notes payable
2,115,229
1,184,627
Asset retirement obligations
119,392
87,485
Deferred income taxes
784,475
581,439
Other long-term liabilities
61,030
38,482
Total long-term liabilities
4,561,126
2,914,033
Shareholders’ equity
Common stock - $0.01 par value,
160,000,000 shares authorized; 124,895,537 and 119,478,282 shares
issued; and 124,813,565 and 119,458,674 shares outstanding,
respectively
1,249
1,194
Additional paid-in capital
2,498,678
2,133,172
Retained earnings
2,373,732
1,776,541
Treasury stock, at cost, 81,972 and 19,608
shares, respectively
(3,029
)
(45
)
Total Matador Resources Company
shareholders’ equity
4,870,630
3,910,862
Non-controlling interest in
subsidiaries
225,580
216,826
Total shareholders’ equity
5,096,210
4,127,688
Total liabilities and shareholders’
equity
$
10,623,291
$
7,726,996
Matador Resources Company and
Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME - UNAUDITED
(In thousands, except per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenues
Oil and natural gas revenues
$
770,155
$
701,527
$
2,249,974
$
1,792,353
Third-party midstream services
revenues
38,316
29,931
103,324
86,517
Sales of purchased natural gas
51,666
40,329
147,377
106,481
Realized gain (loss) on derivatives
4,528
(6,975
)
8,573
(6,454
)
Unrealized gain (loss) on derivatives
35,118
7,482
25,364
(8,244
)
Total revenues
899,783
772,294
2,534,612
1,970,653
Expenses
Production taxes, transportation and
processing
72,737
71,697
219,702
189,174
Lease operating
86,808
66,395
242,133
171,845
Plant and other midstream services
operating
43,695
30,808
120,576
92,510
Purchased natural gas
31,222
37,641
105,894
93,192
Depletion, depreciation and
amortization
242,821
192,794
681,066
496,633
Accretion of asset retirement
obligations
1,657
1,218
4,259
2,709
General and administrative
28,787
31,731
86,353
80,879
Total expenses
507,727
432,284
1,459,983
1,126,942
Operating income
392,056
340,010
1,074,629
843,711
Other income (expense)
Net loss on impairment
—
—
—
(202
)
Interest expense
(36,169
)
(35,408
)
(111,717
)
(85,813
)
Other income (expense)
2,111
(11,614
)
567
5,289
Total other expense
(34,058
)
(47,022
)
(111,150
)
(80,726
)
Income before income taxes
357,998
292,988
963,479
762,985
Income tax provision (benefit)
Current
(21,096
)
8,958
26,280
8,958
Deferred
106,417
5,631
203,805
119,609
Total income tax provision
85,321
14,589
230,085
128,567
Net income
272,677
278,399
733,394
634,418
Net income attributable to non-controlling
interest in subsidiaries
(24,386
)
(14,660
)
(62,605
)
(42,883
)
Net income attributable to Matador
Resources Company shareholders
$
248,291
$
263,739
$
670,789
$
591,535
Earnings per common share
Basic
$
1.99
$
2.21
$
5.45
$
4.97
Diluted
$
1.99
$
2.20
$
5.44
$
4.93
Weighted average common shares
outstanding
Basic
124,814
119,147
123,107
119,121
Diluted
124,983
120,081
123,358
120,045
Matador Resources Company and
Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS - UNAUDITED
(In thousands)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Operating activities
Net income
$
272,677
$
278,399
$
733,394
$
634,418
Adjustments to reconcile net income to net
cash provided by operating activities
Unrealized (gain) loss on derivatives
(35,118
)
(7,482
)
(25,364
)
8,244
Depletion, depreciation and
amortization
242,821
192,794
681,066
496,633
Accretion of asset retirement
obligations
1,657
1,218
4,259
2,709
Stock-based compensation expense
4,279
4,556
10,091
10,777
Deferred income tax provision
106,417
5,631
203,805
119,609
Amortization of debt issuance cost and
other debt-related costs
2,700
2,101
12,286
4,996
Other non-cash changes
(363
)
15,696
(1,027
)
14
Changes in operating assets and
liabilities
Accounts receivable
(20,818
)
(52,983
)
(75,904
)
3,424
Lease and well equipment inventory
(1,207
)
(2,986
)
(8,587
)
(10,223
)
Prepaid expenses and other current
assets
(398
)
(17,693
)
(78
)
(41,817
)
Other long-term assets
3,231
(803
)
3,075
1,269
Accounts payable, accrued liabilities and
other current liabilities
31,100
46,923
45,932
18,691
Royalties payable
19,071
12,570
52,882
22,655
Advances from joint interest owners
(1,380
)
(25,962
)
35,105
(30,941
)
Income taxes payable
(15,794
)
10,550
(1,948
)
8,873
Other long-term liabilities
1,562
(1,559
)
2,939
150
Net cash provided by operating
activities
610,437
460,970
1,671,926
1,249,481
Investing activities
Drilling, completion and equipping capital
expenditures
(293,716
)
(315,957
)
(905,431
)
(855,468
)
Acquisition of Advance
—
—
—
(1,608,427
)
Acquisition of Ameredev
(1,735,964
)
—
(1,831,214
)
—
Acquisition of oil and natural gas
properties
(65,717
)
(64,689
)
(321,827
)
(120,586
)
Midstream capital expenditures
(61,988
)
(42,738
)
(219,189
)
(75,609
)
Expenditures for other property and
equipment
(3,186
)
(486
)
(3,957
)
(2,964
)
Proceeds from sale of assets
—
279
900
730
Net cash used in investing activities
(2,160,571
)
(423,591
)
(3,280,718
)
(2,662,324
)
Financing activities
Repayments of borrowings under Credit
Agreement
(1,360,000
)
(432,000
)
(3,080,000
)
(2,622,000
)
Borrowings under Credit Agreement
2,220,000
402,000
3,535,000
3,152,000
Repayments of borrowings under San Mateo
Credit Facility
(57,000
)
(32,000
)
(193,000
)
(140,000
)
Borrowings under San Mateo Credit
Facility
71,000
47,000
197,000
150,000
Cost to amend credit facilities
(14,512
)
—
(25,936
)
(8,645
)
Proceeds from issuance of senior unsecured
notes
750,000
—
1,650,000
494,800
Cost to issue senior unsecured notes
(10,452
)
(248
)
(26,073
)
(8,503
)
Purchase of senior unsecured notes
—
—
(699,191
)
—
Proceeds from issuance of common stock
—
—
344,663
—
Cost to issue equity
—
—
(2,566
)
—
Dividends paid
(24,851
)
(17,780
)
(73,598
)
(53,465
)
Contributions related to formation of San
Mateo
12,250
9,000
22,500
23,700
Contributions from non-controlling
interest owners of less-than-wholly-owned subsidiaries
—
—
19,110
24,500
Distributions to non-controlling interest
owners of less-than-wholly-owned subsidiaries
(22,785
)
(16,660
)
(72,961
)
(61,103
)
Taxes paid related to net share settlement
of stock-based compensation
(79
)
(43
)
(14,519
)
(22,833
)
Other
(317
)
(312
)
(912
)
(764
)
Net cash provided by (used in) financing
activities
1,563,254
(41,043
)
1,579,517
927,687
Change in cash and restricted cash
13,120
(3,664
)
(29,275
)
(485,156
)
Cash and restricted cash at beginning of
period
63,903
65,838
106,298
547,330
Cash and restricted cash at end of
period
$
77,023
$
62,174
$
77,023
$
62,174
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
September 30,
June 30,
September 30,
(In thousands)
2024
2024
2023
Unaudited Adjusted EBITDA
Reconciliation to Net Income:
Net income attributable to Matador
Resources Company shareholders
$
248,291
$
228,769
$
263,739
Net income attributable to non-controlling
interest in subsidiaries
24,386
18,758
14,660
Net income
272,677
247,527
278,399
Interest expense
36,169
35,986
35,408
Total income tax provision
85,321
77,986
14,589
Depletion, depreciation and
amortization
242,821
225,934
192,794
Accretion of asset retirement
obligations
1,657
1,329
1,218
Unrealized (gain) loss on derivatives
(35,118
)
11,829
(7,482
)
Non-cash stock-based compensation
expense
4,279
2,974
4,556
Expense related to contingent
consideration and other
243
2,933
11,895
Consolidated Adjusted EBITDA
608,049
606,498
531,377
Adjusted EBITDA attributable to
non-controlling interest in subsidiaries
(33,565
)
(28,425
)
(23,102
)
Adjusted EBITDA attributable to Matador
Resources Company shareholders
$
574,484
$
578,073
$
508,275
Three Months Ended
September 30,
June 30,
September 30,
(In thousands)
2024
2024
2023
Unaudited Adjusted EBITDA
Reconciliation to Net Cash Provided by Operating
Activities:
Net cash provided by operating
activities
$
610,437
$
592,927
$
460,970
Net change in operating assets and
liabilities
(15,367
)
(50,841
)
31,943
Interest expense, net of non-cash
portion
33,469
31,044
33,307
Current income tax (benefit) provision
(21,096
)
30,104
8,958
Other non-cash and non-recurring expense
(income)
606
3,264
(3,801
)
Adjusted EBITDA attributable to
non-controlling interest in subsidiaries
(33,565
)
(28,425
)
(23,102
)
Adjusted EBITDA attributable to Matador
Resources Company shareholders
$
574,484
$
578,073
$
508,275
Adjusted EBITDA – San Mateo
(100%)
Three Months Ended
September 30,
June 30,
September 30,
(In thousands)
2024
2024
2023
Unaudited Adjusted EBITDA
Reconciliation to Net Income:
Net income
$
49,768
$
38,285
$
29,917
Depletion, depreciation and
amortization
9,514
9,237
8,821
Interest expense
9,116
9,189
8,325
Accretion of asset retirement
obligations
101
99
84
Non-recurring expense
—
1,200
—
Adjusted EBITDA
$
68,499
$
58,010
$
47,147
Three Months Ended
September 30,
June 30,
September 30,
(In thousands)
2024
2024
2023
Unaudited Adjusted EBITDA
Reconciliation to Net Cash Provided by Operating
Activities:
Net cash provided by operating
activities
$
50,496
$
48,052
$
36,483
Net change in operating assets and
liabilities
9,164
(154
)
2,588
Interest expense, net of non-cash
portion
8,839
8,912
8,076
Non-recurring expense
—
1,200
—
Adjusted EBITDA
$
68,499
$
58,010
$
47,147
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
September 30,
June 30,
September 30,
2024
2024
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
$
248,291
$
228,769
$
263,739
Total income tax provision
85,321
77,986
14,589
Income attributable to Matador Resources
Company shareholders before taxes
333,612
306,755
278,328
Less non-recurring and unrealized charges
to income before taxes:
Unrealized (gain) loss on derivatives
(35,118
)
11,829
(7,482
)
Expense related to contingent
consideration and other
243
5,359
11,895
Adjusted income attributable to Matador
Resources Company shareholders before taxes
298,737
323,943
282,741
Income tax expense(1)
62,735
68,028
59,376
Adjusted net income attributable to
Matador Resources Company shareholders (non-GAAP)
$
236,002
$
255,915
$
223,365
Weighted average shares outstanding -
basic
124,814
124,786
119,147
Dilutive effect of options and restricted
stock units
169
110
934
Weighted average common shares outstanding
- diluted
124,983
124,896
120,081
Adjusted earnings per share attributable
to Matador Resources Company shareholders (non-GAAP)
Basic
$
1.89
$
2.05
$
1.87
Diluted
$
1.89
$
2.05
$
1.86
(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
September 30,
June 30,
September 30,
(In thousands)
2024
2024
2023
Net cash provided by operating
activities
$
610,437
$
592,927
$
460,970
Net change in operating assets and
liabilities
(15,367
)
(50,841
)
31,943
San Mateo discretionary cash flow
attributable to non-controlling interest in subsidiaries(1)
(29,233
)
(23,470
)
(19,145
)
Performance incentives received from Five
Point
12,250
8,750
9,000
Total discretionary cash flow
578,087
527,366
482,768
Drilling, completion and equipping capital
expenditures
293,716
375,076
315,957
Midstream capital expenditures
61,988
52,115
42,738
Expenditures for other property and
equipment
3,186
545
486
Net change in capital accruals
28,940
(61,168
)
(7,104
)
San Mateo accrual-based capital
expenditures related to non-controlling interest in
subsidiaries(2)
(5,890
)
(6,220
)
(13,908
)
Total accrual-based capital
expenditures(3)
381,940
360,348
338,169
Adjusted free cash flow
$
196,147
$
167,018
$
144,599
(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
September 30,
June 30,
September 30,
(In thousands)
2024
2024
2023
Net cash provided by San Mateo operating
activities
$
50,496
$
48,052
$
36,483
Net change in San Mateo operating assets
and liabilities
9,164
(154
)
2,588
Total San Mateo discretionary cash
flow
59,660
47,898
39,071
San Mateo capital expenditures
14,037
11,215
22,812
Net change in San Mateo capital
accruals
(2,017
)
1,479
5,571
San Mateo accrual-based capital
expenditures
12,020
12,694
28,383
San Mateo adjusted free cash flow
$
47,640
$
35,204
$
10,688
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241022553401/en/
Mac Schmitz Senior Vice President - Investor Relations (972)
371-5225 investors@matadorresources.com
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