Matador Resources Company Reports First Quarter 2025 Results and Announces $400 Million Share Repurchase Program and Adjustment in Drilling Activity
DALLAS–(BUSINESS WIRE)–Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) today reported financial and operating results for the first quarter of 2025 and announced the approval of a $400 million share repurchase program and adjustments to its drilling activity for 2025. A slide presentation summarizing the highlights of Matador’s first quarter 2025 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 Summary Comments
Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, commented, “Matador is pleased to report another profitable quarter that exceeded our expectations. During Matador’s 40-year history, we have faced a number of turbulent times with regards to oil and natural gas prices and other outside difficulties. It has been during these times that Matador has relied upon its operational expertise and its financial strength and the long-term nature of its assets to make some of its most significant progress and growth (see Slide A). This time, Matador believes it is in its strongest position yet to take advantage of the opportunities out there in these challenging times (see Slide B). Matador has a strong balance sheet, approximately 200,000 net acres in the Delaware Basin, production at all-time highs, record oil and natural gas reserves, a ‘gas bank’ in its Cotton Valley holdings in Northwestern Louisiana, a strategic midstream business, a 10 to 15 year inventory of quality oil and gas locations and an experienced, tested and capable leadership team that has and is taking the necessary precautions and steps to take full advantage of the various opportunities that may present themselves to us.
Share Repurchase Program
“Matador is also excited to announce that its Board of Directors has authorized the repurchase of up to $400 million of Matador’s common stock (see Slide C). Matador is pleased that the combined strength of our significant free cash flow, increasing production and midstream business as well as confidence in its proven asset base and net asset value convinced Matador’s board and senior staff that now was the time to implement share repurchases as an additional way to return value to its present and future shareholders. Any stock repurchases would be incremental to Matador’s current quarterly fixed dividend of $0.3125 per share. This quarterly dividend amount has been raised six times in four years and its expenditure remains safely within our cash flow estimates at current commodity prices.
“Matador expects to be opportunistic in its share repurchases, which may be conducted through a variety of methods, including open market purchases, 10b5-1 trading plans, privately negotiated transactions or other means. The timing and number of shares that Matador may purchase is subject to a variety of factors, including Matador’s stock price, market conditions, trading volume and other uses for Matador’s free cash flow.
“Matador’s board, management and staff have long been purchasers of Matador’s shares. In fact, Matador’s directors and executive officers purchased an aggregate amount of 31,100 shares of Matador stock for $1.6 million during the first quarter of 2025 (see Slide D). In addition to these Matador board and management purchases, over 100 other employees were also pre-cleared to purchase Matador stock during the quarter, and over 95% of Matador employees participate in Matador’s Employee Stock Purchase Plan, or ESPP. Matador believes that repurchasing offers a compelling value, and we are grateful to have the opportunity for not only our shareholders to purchase shares individually but also for Matador to provide value to all employees and shareholders through Matador’s direct repurchase of its stock.
Prepared for Opportunities
“Matador’s recent press release on April 4, 2025 and shareholder letter on April 8, 2025 outlined certain precautionary steps that Matador has taken to prepare for times of uncertainty, to minimize the impact of recent volatility and to be ready for any surprises or any unexpected events or opportunities. These precautionary steps include:
- Repayment of $190 million in borrowings under Matador’s credit facility during the first quarter of 2025;
- Sale of non-core assets and other transactions for approximately $440 million (inclusive of potential drilling incentives) during the fourth quarter of 2024 and the first quarter of 2025, including the sale of Matador’s 19% ownership interest in the parent company of Piñon Midstream, LLC for approximately $115 million, the sale of the last portions of our Eagle Ford positions for approximately $30 million, and the contribution of Pronto Midstream, LLC (‘Pronto’) to San Mateo Midstream, LLC (‘San Mateo’) for an upfront cash payment to Matador of approximately $220 million and the ability to earn additional drilling incentives of up to $75 million;
- Execution of new hedges to further protect Matador’s balance sheet;
- Drilling rig and other service contracts structured with the optionality to quickly adjust Matador’s activity based upon market conditions; and
- Securing inventory in advance for steel goods such as casing, valves and surface equipment through the third quarter of 2025, thereby mitigating near-term steel tariff impacts.
“Finally, in response to recent commodity price volatility, Matador has decided to adjust its drilling and completion activity for 2025 to provide for more optionality. Matador began 2025 operating nine drilling rigs and now expects to drop to eight drilling rigs by the middle of 2025, which is made possible by the flexibility in its service contracts allowing for rapid reduction of operations. Matador expects to also adjust its completion schedule in accordance with actual drilling activity but will remain focused to take advantage of certain operational efficiencies such as batch drilling and completion technologies as well as upgrades in rigs and other equipment as they occur.
The Effect of the Adjustment in Drilling and Completion Activity
“The adjustment in activity is expected to reduce Matador’s drilling, completing and equipping (‘D/C/E’) capital expenditures for full-year 2025 by $100 million from Matador’s original expectation of $1.375 billion to a revised expectation of $1.275 billion. This additional $100 million in free cash flow for 2025 and the sale of certain assets described above provides Matador with additional flexibility to repay debt, repurchase shares, consider additional dividend increases and take advantage of accretive land, production or midstream opportunities (see Slide E). In addition, Matador expects to continue to monitor market conditions and has the flexibility to add back the ninth drilling rig or drop additional drilling rigs in 2025 depending on market volatility and the macroeconomic environment. Furthermore, Matador expects to use this flexibility and optionality to continue to reduce costs, extend lateral lengths, expand our ‘U-Turn’ drilling program and increase efficiencies.
Better-Than-Expected First Quarter 2025 Production Results
“Despite market volatility, third-party midstream constraints and severe weather during the first quarter of 2025, Matador’s total oil and natural gas production increased 33% to an average of 198,631 BOE per day in the first quarter of 2025 from an average of 149,760 barrels of oil and natural gas equivalent (‘BOE’) per day in the first quarter of 2024. This result was 1% better than the midpoint of Matador’s expected range of 195,000 BOE per day to 197,000 BOE per day.
“Matador’s average oil production increased 36% to approximately 115,030 barrels of oil per day during the first quarter of 2025 from 84,777 barrels of oil per day in the first quarter to 2024 (see Slide F). Matador’s average natural gas production increased 29% to 501.6 million cubic feet per day in the first quarter of 2025 from 389.9 million cubic feet per day in the first quarter of 2024.
“Matador turned to sales 40 gross (33.5 net) operated wells during the first quarter of 2025 and earned drilling incentives totaling $6.4 million from its joint venture partner in San Mateo on 13 of these wells. (By comparison, Matador only turned to sales 12 gross (9.4 net) operated wells during the first quarter of 2024.) During the first quarter of 2025, Matador turned to sales its first three-mile lateral wells. While these three-mile lateral wells were turned to sales late in the first quarter and are continuing to clean up, Matador is encouraged by the early results from these wells and looks forward to discussing them in more detail after the completion of the second quarter of 2025.
“Among the other wells turned to sales during the first quarter of 2025 were 11 gross (10.7 net) wells on the eastern side of Matador’s newly acquired Ameredev acreage. These 11 wells averaged a production rate of over 1,450 BOE per day per well (70% oil) during their 24-hour initial production (‘IP’) tests for an aggregate total of over 15,950 BOE per day. The coordination and execution to bring these wells online is a good example of the successful integration of the Ameredev assets and the efficiency of batch drilling and completion activities. Matador estimates that turning these wells to sales added approximately 12 million BOE to Matador’s proved developed producing reserves.
“Of the 40 gross (33.5 net) operated wells turned to sales in the first quarter of 2025, 38 gross (31.6 net) of these operated wells (95%) were turned to sales during the second half of the first quarter. The wells turned to sales during the second half of the first quarter of 2025 set Matador up for anticipated record production results during the second quarter of 2025. Matador expects to produce average total oil and natural gas production of 207,000 BOE per day during the second quarter of 2025, including 122,000 barrels of oil per day and 510.0 million cubic feet of natural gas per day.
Continued Execution and Efficiency Improvement
“With 13 formations and over 20 producing zones, Matador believes the Delaware Basin is one of the best basins in which to operate in turbulent times (see Slides G and H). Matador has approximately 18.3 million feet of inventory and 1,869 locations in the Delaware Basin. Matador estimates that these locations provide 10 to 15 years of inventory with average rates of return in excess of 50% at either (i) $70 per barrel of oil and $3 per million British thermal unit (‘MMBtu’) of natural gas or (ii) $60 per barrel of oil and $4 per MMBtu of natural gas (see Slide I). According to Enverus Inc. data (see Slide J), Matador leads its peers in well productivity.
“Matador was able to achieve the production results discussed above while continuing to increase its operational efficiencies. Matador’s drilling and completion costs decreased 3% to $880 per completed lateral foot during the first quarter of 2025 from $910 per completed lateral foot during full-year 2024. The productivity of Matador’s wells and its cost efficiencies, such as drilling ‘U-Turn’ wells (see Slide K) have resulted in Matador having the highest profit margins among its peers according to data from Bloomberg LP (see Slide L).
“San Mateo, Matador’s midstream joint venture, is primarily a fixed fee business and primarily established to help provide flow assurance for Matador and San Mateo’s third-party customers. San Mateo also helps balance the impact of commodity price fluctuations on Matador’s free cash flow. San Mateo currently owns processing plants with a designed inlet capacity of 520 million cubic feet per day, 16 saltwater disposal wells with a designed disposal capacity of 475,000 barrels per day and 590 miles of oil, gas and water pipelines (see Slide M). San Mateo is currently expanding its Marlan processing plant to add an additional 200 million cubic feet per day of processing capacity. This plant expansion remains ‘on time’ and ‘on budget’ and is expected to be operational in the second quarter of 2025 (see Slide N).
Town Hall Conference Call
“We invite each of our shareholders and other interested parties to join our first ever ‘Town Hall’ Conference Call on Monday, April 28, 2025, at 3:30 p.m. Central Time. During the Town Hall, we plan to further address our first quarter 2025 results, the volatility in commodity markets and our drilling plans throughout 2025. Please send any questions that you may have in advance by email to investors@matadorresources.com no later than 3:00 p.m. Central Time on Friday, April 25, 2025. The live conference call will be available through the Company’s website at www.matadorresources.com on the Events and Presentations page under the Investor Relations tab or you can use the following link to obtain call in details: https://register-conf.media-server.com/register/BI236c16a90e62412795441990de597e78.
Closing Thoughts
“Over the last 40 plus years in the oil and gas business, the Board, the staff and I have weathered many turbulent storms. Given this history, the board, executive team and I have always tried to prepare Matador to be ready for changes, surprises and challenging times. With a strong balance sheet, $1.8 billion in liquidity, its proven locations and its other high quality drilling locations as well as its brick-by-brick acquisition strategy (see Slide O), Matador believes it is ready and able to continue to increase its asset base and shareholder value in 2025 despite market volatility (see Slide P). Our assets, board, staff and financial strength have put us in a position where we expect to come out of these volatile and uncertain times better than where we were when we entered them – just as we have done many times in the past. We look forward to talking with you during our ‘Town Hall’ Conference Call and invite you to join us for our annual shareholder meeting in June.”
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. 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 2025 Guidance Update
Effective April 23, 2025, Matador updated its full-year 2025 guidance range for total oil and natural gas equivalent production, oil production, natural gas production and capital expenditures as set forth in the table below. As noted above, Matador expects to adjust its activity in 2025 and reduce to eight rigs in the middle of the year as well as adjust its completions schedule to increase operational efficiencies and enhance well returns during these volatile times. In light of present condition, Matador now expects to produce approximately 200,000 BOE per day in 2025, a change of 5,000 BOE per day, and to save $100 million in capital costs as compared to its original expectations. The change is primarily attributable to an expected 4.3 fewer net operated wells turned to sales in 2025 due to the adjustment to operating eight drilling rigs noted above and a corresponding expected reduction in activity from Matador’s non-operated partners due to the recent market and commodity price volatility. As a result of this decreased pace, Matador expects a 7% reduction in capital expenditures and a 2% reduction in production during 2025 as compared to its prior guidance, but it is still a 17% increase in production compared to our production in 2024.
|
Production |
Actual 2024 Results |
New Full-Year 2025 Guidance Range |
Difference(1) |
|
Total, BOE per day |
170,751 |
198,000 to 202,000 |
+17% |
|
Oil, Bbl per day |
99,808 |
117,000 to 119,000 |
+18% |
|
Natural Gas, MMcf per day |
425.7 |
486.0 to 498.0 |
+16% |
|
D/C/E CapEx(2) |
$1.32 billion |
$1.18 to $1.37 billion |
-3% |
|
Midstream CapEx(3) |
$238.7 million |
$120 to $180 million |
-37% |
|
Total CapEx |
$1.56 billion |
$1.30 to $1.55 billion |
-9% |
|
(1) The midpoint of guidance as updated on April 23, 2025 as compared to actual 2024 results. |
|
(2) Capital expenditures associated with drilling, completing and equipping wells. |
|
(3) Includes Matador’s share of estimated capital expenditures for San Mateo and other wholly-owned midstream projects, including projects completed by Pronto. Pronto was wholly-owned by Matador until December 18, 2024, the date Pronto was contributed to San Mateo in the Pronto Transaction. Excludes the acquisition cost of Ameredev’s midstream assets. |
Operational and Financial Update
Hedging Update
In light of prior experience in turbulent times, Matador entered into additional oil and natural gas hedges during the first quarter of 2025. A summary of our hedges is provided in the following tables:
|
Oil Costless Collars |
Volume Hedged (Bbl per day) |
Weighted Average Price Floor ($/Bbl) |
Weighted Average Price Ceiling ($/Bbl) |
|
H1 2025 |
45,000 |
$60 |
$86 |
|
H2 2025 |
70,000 |
$52 |
$77 |
|
|
|
|
|
|
Natural Gas Costless Collars |
Volume Hedged (MMcf per day) |
Weighted Average Price Floor ($/MMBtu) |
Weighted Average Price Ceiling ($/MMBtu) |
|
2026 |
150.0 |
$3.50 |
$6.70 |
|
|
|
|
|
|
Waha Basis Differential Swaps |
Volume Hedged (MMcf per day) |
Weighted Average Swap Price ($/MMBtu) |
|
|
2025 |
30.0 |
-$0.59 |
|
|
2026 |
150.0 |
-$2.52 |
|
|
|
|
|
First Quarter 2025 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 198,631 BOE per day in the first quarter of 2025, which was a 33% year-over-year increase from an average of 149,760 BOE per day in the first quarter of 2024. The better-than-expected oil and natural gas production was primarily due to outperformance of wells that were turned to sales in the fourth quarter of 2024.
|
Production |
Q1 2025 Average Daily Volume |
Q1 2025 Guidance Range(1) |
Difference(2) |
Sequential(3) |
YoY(4) |
|
Total, BOE per day |
198,631 |
195,000 to 197,000 |
+1% Better than Guidance |
-1% |
+33% |
|
Oil, Bbl per day |
115,030 |
114,000 to 115,000 |
+1% Better than Guidance |
-3% |
+36% |
|
Natural Gas, MMcf per day |
501.6 |
486.0 to 492.0 |
+3% Better than Guidance |
+1% |
+29% |
|
(1) Production range previously projected, as provided on February 18, 2025. |
|
(2) As compared to midpoint of guidance provided on February 18, 2025. |
|
(3) Represents sequential percentage change from the fourth quarter of 2024. |
|
(4) Represents year-over-year percentage change from the first quarter of 2024. |
First Quarter 2025 Realized Commodity Prices
The following table summarizes Matador’s realized commodity prices during the first quarter of 2025, as compared to the fourth quarter of 2024 and the first quarter of 2024.
|
|
Sequential (Q1 2025 vs. Q4 2024) |
|
YoY (Q1 2025 vs. Q1 2024) |
||||||||
|
Realized Commodity Prices |
Q1 2025 |
|
Q4 2024 |
|
Sequential Change(1) |
|
Q1 2025 |
|
Q1 2024 |
|
YoY Change(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Prices, per Bbl |
$72.38 |
|
$70.66 |
|
+2% |
|
$72.38 |
|
$77.58 |
|
-7% |
|
Natural Gas Prices, per Mcf |
$3.56 |
|
$2.72 |
|
+31% |
|
$3.56 |
|
$2.96 |
|
+20% |
|
(1) First quarter 2025 as compared to fourth quarter 2024. |
|
(2) First quarter 2025 as compared to first quarter 2024. |
First Quarter 2025 Financial Highlights
The following table summarizes Matador’s financial highlights during the first quarter of 2025, as compared to the first quarter of 2024.
|
|
YoY (Q1 2025 vs. Q1 2024) |
||||||
|
(In millions, except per share data) |
Q1 2025 |
|
Q1 2024 |
|
YoY Change(1) |
||
|
|
|
|
|
|
|
||
|
Net income(2) |
$ |
240.1 |
|
$ |
193.7 |
|
+24% |
|
Earnings per common share (diluted)(2) |
$ |
1.92 |
|
$ |
1.61 |
|
+19% |
|
Adjusted net income(2) |
$ |
249.3 |
|
$ |
206.2 |
|
+21% |
|
Adjusted earnings per common share (diluted)(2) |
$ |
1.99 |
|
$ |
1.71 |
|
+16% |
|
Adjusted EBITDA(2) |
$ |
644.2 |
|
$ |
505.4 |
|
+27% |
|
Net cash provided by operating activities(3) |
$ |
727.9 |
|
$ |
468.6 |
|
+55% |
|
Adjusted free cash flow(2) |
$ |
141.9 |
|
$ |
28.6 |
|
+396% |
|
|
|
|
|
|
|
||
|
San Mateo net income(4) |
$ |
45.2 |
|
$ |
39.7 |
|
+14% |
|
San Mateo Adjusted EBITDA(4) |
$ |
60.4 |
|
$ |
58.2 |
|
+4% |
|
(1) First quarter 2025 as compared to first quarter 2024. |
|
(2) Attributable to Matador Resources Company shareholders. |
|
(3) As reported for each period on a consolidated basis, including 100% of San Mateo’s net cash provided by operating activities. |
|
(4) 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. |
First Quarter 2025 Expenses
Matador’s lease operating expenses (“LOE”) increased 11% sequentially from $5.37 per BOE in the fourth quarter of 2024 to $5.96 per BOE in the first quarter of 2025. This increase was expected as Matador expected LOE to be in the range of $5.75 to $6.25 per BOE in the first quarter of 2025 but dropping to a range of $5.50 to $6.00 per BOE for full-year 2025. LOE is generally higher on a per unit basis in the first quarter of the year due primarily to winterization efforts.
Matador’s general and administrative (“G&A”) expenses decreased 15% sequentially from $2.22 per BOE in the fourth quarter of 2024 to $1.89 per BOE in the first quarter of 2025. This decrease is due in part to employee bonuses that were paid in the fourth quarter of 2024 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 9% decrease in Matador’s share price from $56.26 at the end of the fourth quarter of 2024 to $51.09 at the end of the first quarter of 2025.
First Quarter 2025 Capital Expenditures
Matador’s D/C/E capital expenditures for the first quarter of 2025 were $394.4 million, which was 7% above the midpoint of Matador’s expected range of $340 to $400 million because Matador turned to sales the upper range of its estimated 35 to 40 gross operated wells later in the first quarter of 2025 and incurred additional capital expenditures associated with acquired working interests. The wells associated with these additional capital expenditures are expected to contribute to Matador’s anticipated record production in the second quarter of 2025. Midstream capital expenditures of $46.4 million for the first quarter of 2025 were below Matador’s expectations of $80 million in total midstream capital expenditures for the quarter due to timing of costs incurred for the Marlan plant expansion and the associated gas gathering system.
|
Q1 2025 Capital Expenditures ($ millions) |
Actual |
Guidance(1) |
Difference vs. Guidance(2) |
|
D/C/E |
$394.4 |
$370.0 |
+7% |
|
Midstream |
$46.4 |
$80.0 |
-42% |
|
(1) Midpoint of guidance as provided on February 18, 2025. |
|
(2) As compared to the midpoint of guidance provided on February 18, 2025. |
Midstream Update
The table below sets forth San Mateo’s throughput volumes for the first quarter of 2025, as compared to the first quarter of 2024. San Mateo expects that its natural gas processing capacity will increase to 720 MMcf per day from its current 520 MMcf per day upon completion of the Marlan plant expansion in the second quarter of 2025.
|
|
|
YoY (Q1 2025 vs. Q1 2024) |
||||
|
San Mateo Throughput Volumes |
|
Q1 2025 |
|
Q1 2024 |
|
Change(1) |
|
|
|
|
|
|
|
|
|
Natural gas gathering, MMcf per day |
|
470 |
|
425 |
|
+11% |
|
Natural gas processing, MMcf per day |
|
456 |
|
399 |
|
+14% |
|
Oil gathering and transportation, Bbl per day |
|
48,800 |
|
48,800 |
|
Flat |
|
Produced water handling, Bbl per day |
|
420,800 |
|
435,200 |
|
-3% |
|
(1) First quarter 2025 as compared to first quarter 2024. |
Second Quarter 2025 Estimates
Second Quarter 2025 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 198,631 BOE per day in the first quarter of 2025 to grow by 4% to a midpoint of approximately 207,000 BOE per day in the second quarter of 2025.
Contacts
Mac Schmitz
Senior Vice President – Investor Relations
(972) 371-5225
investors@matadorresources.com
